Congratulations America!! We just reached the $14 Trillion mark!! That's right, we are now officially $14,001,000,000,000 dollars in debt.
Our legal debt ceiling is $14,294,000,000,000. This means that we are only $300 billion dollars away from reaching this legal limit.
And what does Treasury Secretary Geithner recommend? That we raise the cap of course!!
Geithner says that reaching our limit would ruin not only our economy, but the economies of various other countries too.
If we do actually reach the limit, what would actually happen? We would all receive IOUs!!
We need to fix our deficit problem before it gets even more out of control. Our deficit has no reason to be so high (or to continuously expand). The question is, how do we do it??
For now, I think we need to raise our limit for a very limited amount of time. Then, we need to come up with a plan to reduce the deficit quickly, even if that means that our economy might hurt for a bit longer.
What do you think?? Do we need to extend the gap before it's too late?
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7 comments:
Wow this is quite unfortunate. I never knew we were so much in debt. Nor did I know there was a legal limit to our debt. Fun to know.
Anyways, maybe if we alerted all Americans that we were so much in debt, raising taxes wouldn't be such a hassle. As the president of the United States, Obama needs to act fast, or people might blame him for the budget deficit (unless he was the one who raised the deficit to such a high amount). I think the only thing we can do is go to the American people for help. Governments need to tax more, and although, yes, many thing like propositions and tax increases do require voter approval, if we open the minds of Americans, maybe they'll listen. Otherwise, I think we're doomed, because honestly, 14 trillion dollars, let alone 1 trillion dollars is a lot of money. And if we hurt the economies of other countries, I don't think they'd like nor help us very much in the future. Yes, I agree with Jessica that we should extend the debt cap, but not to the point where we rely on the cap too much. This is a problem we must solve eventually, or we could ruin the lives of many people--not just Americans, but other countries too.
Thought I would share this as well. If every single American chipped in to pay for this debt, that would mean everyone would need to pay about $45,604 each. To put it bluntly. THATTTTT SUUUUUUUUUUUUUCKKKKKKKKKSSSSSSSSSS
I would disagree with the proposal to extend the cap, but I think that keeping the cap and spontaneously springing a tax raise on every American would not be taken very well. Sure, there's that single-digit percent of the U.S. population that could probably chip in a little more on their taxes, but for each person to pay over $45,000 in taxes is almost unreasonable. The government needs to stop borrowing (and wasting) money because they can and start finding ways to cut spending, fast! I stumbled upon this article today, talking about how schools in Michigan are making due because of their lack of funding and some other nonessential things (like having many administrators when they're not needed). This just shows that people can cut costs from the schools if they want. But that's the thing: they need to want it. Truthfully, I think that the cap should stay and allow us to deal with the situation right now, but with the numerous processes Congress already has to go through to pass legislation, I'm not quite sure a radical approach would be beneficial. However, Congress needs to get on this quickly and the public needs to be more aware so that at least we can hear more opinions on this very important and very (or at least soon to be) pressing issue.
Here's the link to the story:
http://www.mackinac.org/111
I think that raising the budget debt cap would be an acceptable temporary solution, since the uncertain (negative) effects of reaching our debt ceiling are too great--confidence in America's economy and the dollar would drop dramatically.
To fix the debt problem, the best long term approach, in my opinion, is to drastically reduce military spending (seeing as how we outspend every other nation combined) and to reform Medicare, which might be difficult considering the influence of senior citizens on American politics.
This is quite scary, considering our GDP is $14.12 trillion; this means that in one entire year, the total worth of our goods and services adds up to $14.12 trillion. How scary!
I agree with Peter, though the idea of raising the debt cap scares me. I do think it is necessary to keep our economy stable, but I also think that reducing government spending all across the board is essential. The easiest budget to cut drastically is the military, if we just stop being the world's policeman, but everything will need to be seriously cut, in addition to increased taxes. I believe in Hamilton's original theory of having a bit of debt to keep the rich who have invested "rooting for" the country, but this amount is excessive.
The debt is getting out of control. I know that it's unpopular for politicians to raise taxes and lower spending at the same time, but someone has to bite the bullet. If no one does than this is going to turn into a major time bomb. Fixing the problem is also made more difficult by the fact that the Republicans won't raise taxes and the democrats won't cut spending (at least for the most part). The solution? Military has always been an obvious choice for me. We spend about seven times as much as the next country down on the list of top military budgets, China. Our activism has had some benefits, but through it, we've made scores of enemies, as well as friends. Overall, it's just not worth it. In the mean time though, I think we might have to raise the cap to avert immediate disaster.
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