National debt ceiling 101: Is a crisis looming? The Christian Science Monitor, Mark Trumbull, March 8, 2011, CSMonitor. com In this article, Mark Trumbull, a staff writer for The Christian Science Monitor, points out several different areas that the USA‘s National Debt crisis effects. Trumbull asks nine different questions about the debt crisis and then answer’s them as best as possible. His effort is to bring the words of this huge political battle from a high scope to the reading level of the normal American.
In an attempt to educate the normal everyday American about the debt crisis, Trumbull raises nine different questions: 1) What is the debt ceiling, and why does it exist? 2) Are we close to hitting the limit? 3) Will Congress raise the limit and what happens if they don’t? 4) Is the national debt’s growing size behind this “ceiling” controversy? 5) What would fiscal hawks like to achieve, in return for raising the ceiling? 6) Could the tea party spirit spark an outright refusal to raise the debt limit? 7) If this bogs down in a game of political chicken, how can the nation keep paying its bills? ) What’s the public’s view on the national debt and raising the ceiling? 9) What’s the solution to the problem of rising national debt? “The government currently spends more money than it brings in through revenue, which is why the government has a deficit and a growing debt” (Paletta, 2012). This general statement from Damian Paletta is what I believe should be the main focus on the debt crisis. It’s a simple formula, revenues have to be higher than expenses every year, but for some reason, it seems impossible to follow.
What really gets me angered is how this debt crisis is portrayed in the article. It almost seems like the battle between Republican’s and Democrat’s blaming each other is the focus of the article and the debt crisis is just an example of their battle. “In a year of high drama over federal budgets, the nation’s so-called national debt ceiling is becoming a prominent part of the political debate” (Trumbull, 2011). This is how the article begins, which proves to me, Trumbull is trying to put some biased opinion towards which political party he is a part of.
The fact that he uses “the nation’s so-called national debt ceiling” to describe the situation really chuckles me. The way he describes it makes me feel as if he’s putting down the crisis like it’s not a big deal, like it is only a “so-called” debt. To me, this isn’t a small situation, law’s need to be implemented, changes need to happen and the USA needs to regain the power that we once had. I understand that no one is perfect and there are always going to be goals that people want to reach but ultimately they won’t.
I feel as if the USA just keep’s setting them up for failure by slowly increasing the debt ceiling little by little. “But for more than 70 years, the House and Senate have agreed on an overall debt limit. The ceiling has been adjusted upward frequently, more than 40 times just since 1980” (Trumbull, 2011). Is it really necessary to have 40 small increases in the debt limit, or should America use their talent and education to pay someone to do some research and forecast a debt ceiling that is capable of being met. The more increases to the limit, the weaker the American economy looks.
We are too great of a country with so much to offer, best education in the world, safest country in the world, but if we can’t control what we owe to other countries then we will be frowned upon in the World. According to Reuters, the uncertainty in change and delay has lead to the debt increasing. “Delays in raising the debt limit created uncertainty in the Treasury market and led to higher borrowing costs, according to a report from the Government Accountability Office (GAO), an investigative arm of Congress” (Reuters, 2012).
I’d like to see what would happen if the tides were turned and instead of us owing China trillions of dollars, what if they owed us trillions of dollars? It would lead to our government trying to have some sort of control over China’s government, us trying to put rules in place in their country and could ultimately lead to war. As of January 2012, Congress raised our debt limit to $16. 4 trillion. That is an extreme amount of money and almost shocking to hear that we owe are behind that far. It makes you think, what have we done so wrong to be in this current situation?
What could we have done differently in the past to not be here? These questions need to be raised everyone involved in this mess and it needs to be figured out. Congress has the ability to raise the cap limit, which they have often done in the past, but say that this time, if they don’t see serious plans, the limit won’t be raised. The US Treasury has enough “tools” to keep the government afloat into early 2013 but after that, it’s up to the strategies we have put into play to execute. The government is spending $3 for every $2 it takes in according to the Urban Institute.
That is a stat that needs to be the opposite way if America plans on seeing changes in the near future. The USA faces a tough financial struggle in the upcoming years. I believe that we need to get our troops out of the Middle East and transfer the money spent on war into our Economy. “The national debt grows when spending outstrips tax revenues, and it has doubled since 2004, surging for reasons that include health-care costs, two wars, and efforts to revive the economy after its 2008 crash” (Trumbull, 2011).
Ben Bernake, Federal Reserve Chairman, stated that our current fiscal course is unsustainable and that deficits don’t need to be fixed in a single year. Yes, deficits don’t need to be fixed in a single year but if we don’t make serious moves, we may reach a time where deficits do need to be fixed in a single year. Our debt is so high that our country does have the “top-tier, triple-A credit rating from Standard and Poor’s” (Reuters, 2012), that it once had.
Like I mentioned earlier, our nation’s image to the rest of the world needs to be stronger than any other nation, and losing our credit terms is not a strong picture. “On January 1, 2013, nearly $8 trillion in tax increases and across-the-board spending cuts are scheduled to take effect” (Eells, 2012). This is huge to our economy and hopefully will put us where we need to be. I am excited to see what our government will do to try and regain a stable cash flow and reform our spending as a country. Growing up in America, we’ve always been taught about the good we’ve done and why we are great.
Well, this is not something that can reinforce how great America is but rather prove that we are unstable. Money makes the world go round and fortunately for us, the world isn’t going anywhere. We are in desperate needs for change and I believe our future is going to rapidly change. Technology is going to increase, taxes will increase, spending will increase, so what is going to decrease? Living expenses and the price of goods? I’m not sure how we are going to stabilize this debt but I am sure that it isn’t going to happen overnight.
I believe Congress should stick with the plan of not raising the limit once again unless they see serious cut’s that are going to make positive change to our debt. Getting our country out of war and raising taxes on the rich would help reduce our debt but that comes with huge risk. In the last debate, our President explained how we are going to get our troops home but we can’t stop focus on Pakistan due to their nuclear capabilities. Whatever our government decides to do, I’m excited to hear the reasoning behind it and take it in for my own knowledge of how to handle debt.