Well, according to the debt limit put forth, yes. In mid
October, the US reaches the debt limit and officially* cannot borrow any money.
The debt limit, a limit of spending put forth by congress, is exactly what it
sounds like: a limit on the borrowing of money that the US does. Debt limit explained (this is kind of biased toward Congress so watch out)
Of
course, there have been many debt limit scares, like the one in May, but the
recent increase in them may be sign of the impending doom that may fall upon
the debt ridden US. Or, it could all be a scare tactic to get American’s behind
Obama’s back on whatever spending plan he puts forth. Obama debt limit scare
In
the end, only one thing is for sure—there is a debt ceiling, and it is coming
up fast.
How much the US spends per time
(this one has “demonocracy” in its name so it may not be the most politically
unbiased.)
4 comments:
To begin, I'd like to state up front, if it doesn't become immediately obvious later on, that I'm an advocate of small government. Like SMALL government.
According to the U.S. Gov budget, we ran a 1.3 trillion dollar deficit last year, or about 50% of our income (meaning we spent ~150% of our income). Admittedly, the projected deficit for the 2013 fiscal year is just 901 billion, but this doesn't quite fit into the past trends, and especially in light of the projected decrease to ~600 billion by next year, seems overly optimistic. (I'm rather distrusting of the CBO's estimates)
I believe that large cuts to the our government's expenditures are necessary to keep our country economically feasible - according to the Center on Budget and Policy Priorities, we spend almost our entire national income in 3 categories: defense/nat'l security, social security, and health insurance programs (there are 3). It's quite obvious that cuts to these 3 categories are needed to balance the budget, otherwise, we'd need to cut just about everything else.
The main question is, what's the point of a debt ceiling if we can keep raising it? Personally, I feel the idea of a fiscal elevator is more accurate than the "debt ceiling" - we began on the ground level and are descending down as our debt increases, while Congress tries to build floors underneath us to make sure we can keep going. The idea of a "debt ceiling crisis" is simply when Congress decides to stop and ask why we continue to keep digging down. Of course, we just yell at them until they start digging again. Then, there's the secondary question - what are we going to do when we arrive in China?
I agree with Nathan that the government should not keep raising the "debt ceiling," because there is no point in having a limit if it is susceptible to change. I think that the government first needs to recognize that they should keep the limit where it is at and prioritize. However, there is a reason that the government prioritizes national security, social security, and health insurance, and it is because they are important. I think the government should just slow down and deal with the funds they have before making drastic cuts. If the government comes to the point where they feel that they need to make cuts in order to stay under the "debt ceiling," then the budget cuts are necessary, but the cuts should be gradual, to prevent any immediate drastic changes.
I see the debt ceiling problem as one that demonstrates our hope that things will get better without any change. If the debt ceiling continuous to rise, and doesn't seem like it is slowing down, it most likely won't without enacting some serious change. Our country is at a point of debt where the amount of money we owe actually not fathomable. I believe that Nathan's explanation of the fiscal elevator is extremely apt. We are going to continue to fall further in debt, and have Congress continue to "dig." Although change is definitely necessary, the choice of what and how to cut is a touchy subject. Cutting gradually should in theory help protect American debt, but it could also take too much time. The problem with dramatic cuts is that nobody likes them. The government has a very difficult, but historical decision to make. Hopefully they make the right one.
I see Nathan's logic, but find national debt to be a concern but not as great of a concern as it is made out to be.
Here's why:
http://www.nytimes.com/2012/01/02/opinion/krugman-nobody-understands-debt.html?_r=0
(Yes, the NYTimes generally has a left-leaning bias. However, Krugman does adequately dispel the analogy of our debt to a family unable to pay back its mortgage and provide convincing arguments as to why the debt is not as large a problem as it may appear.)
http://www.americanprogress.org/issues/budget/news/2013/03/11/56048/the-united-states-long-term-debt-problem-isnt-as-bad-as-you-thought/
(Note: although American Progress is highly progressive, the piece nonetheless provides reasonable and logical arguments as to why the CBO's data is flawed in several key areas.)
Sourcing! :)
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