A US Debt Limit that’s Unlmited?!?
Why have a debt limit if you can keep raising it? The United States House of Representatives just approved the debt limit by $ 1.9 TRILLION. Yes you read this correctly. We are expected to borrow $1.6 trillion this year from…somewhere. Your Uncle Sam can keep ringing up the credit card charges to a total now of $14.3 trillion. Bring out the party favors, and let’s celebrate like it’s 1999. Isn’t the point of a limit to mean things should stop once you reach that point? I see all of these personal finance blogs about getting out of debt and reducing debt – why shouldn’t our government follow suit?
It seemed like it was only yesterday they increased the limit. Oh wait it was. What seems like eons ago, but was December 24th 2009, Congress raised the debt ceiling 12.4 trillion. It’s the Christmas gift that keeps giving back for many generations to come. Moody’s is again threatening to decrease our AAA rating. Being always late the party, by the time Moody’s actually decreases the U.S. credit rating it will become already accepted fact. Some analysts are saying we should already be downgraded, but we do have some reasons why we haven’t been yet. We are still the world’s reserve currency, but for how long who knows. At least the last crisis people flocked, like seagulls, to treasury bonds. The next round, we might not be so lucky. Who is going to loan us additional money when other countries are tapped out. Countries like China have also threatened to decrease purchasing more treasuries, and from some news reports appear to be doing this already. Brother can you spare a trillion?
Readers what do you think, we as owners of this country should do? Should we do anything? Am I just uneducated about Keynesian economics, and this is nothing to worry about?
If you believe what I say is true, how can we ensure our deficit is reduced, and decrease our spending. Keep the conversation apolitical. I do not want to see comments blaming Bush, Obama, Pelosi or any political party. Let’s look forward, and what action items we can do as a people to get this under control.
Let me circle back to the purpose of this blog – investing and small business. Brett Arends from the WSJ has a good article on ways you can protect yourself financially.
Readers, do you have any other recommendations to help protect yourself financially?
Created: Friday, 5 February 2010 07:00 Last Updated: Friday, 5 February 2010 08:26 Written by: Investor Junkie
Ridiculous! We will never control our spending, b/c politicians don’t have to pay for anything. Love it.
Ok what are you recommendations to do to protect yourself personally?
I think the politians (both parties) aren't even focusing on the hard issues…
I've become so discourage with our government
Instead they focus on the same party line bills, that have been defeated in the past and isn't desired today. Like health care and the attempt to overturn abortion. Thare are more important things to focus on, let's try to get those accomplished!!!
Amen MR. You see the line: "It's the Christmas gift that keeps…"
IJ:
Solution Suggestion #1:
Stop helping others.
Why: Remove the manifest destiny complex, the US govt is not the solution to everyone's problems (abroad or within).
How:
Intl – Reduce presence in foreign countries. Do you know how many US bases we have around the world? And how much each of those are costing a year? How much foreign aid to we provide, yet how many of those programs are truly effective?
Local – Reduce special interest earmarks. Social programs are a necessity, but are not there to provide permanent reliance for every single condition.
We're spread so thin that our resources aren't OPTIMIZED. Instead of trying to solve every problem in the world, focus efforts on select programs and making them work.
I'm not looking forward to paying my current portion of the debt… over $30k already at this point. Maybe make it mandatory for politicians to be self made business owners who understand the value of a dollar and also who have a campaign that includes adding PF education to every school curriculum.
I'm not terribly worried about the National Debt. SmartMoney, from the Wall Street Journal (no bastion of free-spending government thought) had an article not too long ago maintained that compared to other Western countries, our national debt is, if not small, at least significant lower as a percentage of our GDP than places like France and Japan. This is not to say that having a high national debt is a good thing, I just don't think we're quite as bad as everyone seems to think
Based upon your statements could it be said then you are best to invest in emerging markets and commodities like gold? At least my comment to your response is do we want to become like France and Japan? More than ever we are on the fast track to high debt. This isn't a slow train.
My point was more towards the idea that just because the national debt is high, doesn't necessarily mean that we (as Americans) will suffer as a result. That said, investing in emerging markets seems like a good idea in the long term; China considers 7% a slow rate of annual growth, while most of the developed world would be thrilled with half that. (Gold I'm less sure about; there's been quite a run up, and it's possible they are headed for a crash.)
Some consider China's 7% growth rate bogus, but that's a whole other issue.