Debt Ceiling Impacts
Not raising the debt ceiling will end up causing a 40% reduction in expenditures by the federal government. This will impact many areas of economic activity and people's lives.
According to an article in Money, bond holders will continue to get paid but a lot of other folks will have to wait in line until the mess gets cleaned up.
For example tax refunds, salaries of federal employees, military salaries for active duty personnel, medicare and medicaid payments, food stamps, unemployment insurance payments and other federal payments will be deferred.
The deferral of paying most bills will begin mid February and most certainly by March 1, 2013 according to the article.
Cliches like too big to fail, don't begin to describe the problems that will be caused if Congress fails to act on this issue in a responsible way. Playing "Chicken" is not my idea of being responsible.
According to an article in Money, bond holders will continue to get paid but a lot of other folks will have to wait in line until the mess gets cleaned up.
For example tax refunds, salaries of federal employees, military salaries for active duty personnel, medicare and medicaid payments, food stamps, unemployment insurance payments and other federal payments will be deferred.
The deferral of paying most bills will begin mid February and most certainly by March 1, 2013 according to the article.
Cliches like too big to fail, don't begin to describe the problems that will be caused if Congress fails to act on this issue in a responsible way. Playing "Chicken" is not my idea of being responsible.
The problem seems intractable. Continously more debt is also not responsible. One idea may to stop all cash welfare payments. Provide housing, provide food and help provide a job but no cash. The other idea is an across the board 10% reduction in all government programs and salaries. In exchange the debt ceiling can be raised by the amount saved.
ReplyDeleteA lot of the problems are self inflicted. It's my opinion that our government has been irresponsible. Over promise and under perform and certainly don't raise taxes.
ReplyDeleteMy older sister who by any standard is comfortably retired and part of the 53% and receives a pension, medicare, social security benefits and has other wealth she has inherited is in political place where there should be no new taxes and no adjustment in any level of services that she receives from any level of government. This is very hard to sustain when the economy is stingy with jobs and demographically lots of people are ready to retire.
Office holders don't have much incentive to deal with the big problems but their inaction will probably hurt the general economy that is slowly improving and needs both cuts and probably some increases in revenue to address the debt issues the country faces.