2013년 11월 25일 월요일

About 'cnn debt'|WORLD CRISIS : MOODY ‘S DOWNGRADES JAPAN ‘S DEBT RATING ! – CNN.com







About 'cnn debt'|WORLD CRISIS : MOODY ‘S DOWNGRADES JAPAN ‘S DEBT RATING ! – CNN.com








According               to               the               Department               of               the               Treasury,               the               debt               ceiling               set               by               Congress               was               reached               on               Monday               morning.

At               that               time,               the               United               States               government,               by               law,               could               no               longer               legally               borrow               any               more               money               for               expenses               that               the               government               might               incur.

To               be               able               to               borrow               money               again,               the               debt               ceiling               would               have               to               be               raised.

According               to               CNN               Money,               politicians               on               the               left               have               been               warning               that               not               raising               the               debt               ceiling               could               have               catastrophic               consequences               on               America's               credit               standing               in               the               world,               while               Republicans,               especially               tea               party               Republicans,               maintain               that               if               the               debt               ceiling               is               left               as               is,               the               government               cannot               increase               its               debt               and               will               then               be               forced               to               cut               unnecessary               spending               and               decrease               the               size               of               government.

But               ignorance               of               the               debt               ceiling               itself               might               be               driving               the               argument.
               The               debt               ceiling               was               established               at               $14.294               trillion,               a               mark               that               has               been               reached.

Treasury               Secretary               Timothy               Geithner               and               worried               congressmen               (mostly               Democrats,               but               some               Republicans)               have               been               warning               that               to               leave               the               debt               ceiling               at               its               present               level               and               not               allow               the               federal               government               to               borrow               to               maintain               its               operations               and               programs               would               be               irresponsible.

In               fact,               the               word               "irresponsible"               has               been               used               to               describe               not               raising               the               debt               ceiling               by               Republicans               as               well,               including               Speaker               of               the               House               John               Boehner.
               Why               is               that?

Because               if               the               government               cannot               borrow               to               pay               for               the               programs               it               has               in               place               and               cannot               pay               on               the               loans               that               it               already               has               out,               then               it               will               default               on               those               loans.

The               government               borrows               money               to               make               up               the               difference               between               spending               and               actual               revenue,               and               with               the               tax               cuts               and               tax               breaks               that               have               been               in               place               for               nearly               a               decade,               revenue               has               been               falling               short               of               expenditures,               sometimes               by               far.
               Even               when               budgets               weren't               as               spend-heavy               as               they've               been               in               the               past               few               years,               borrowing               to               pay               for               two               wars               and               extensions               on               unemployment               benefits               (commonly               known               as               "emergency"               spending               and               not               usually               counted               as               budgetary               spending,               although               it               certainly               counts               when               talking               about               accumulated               debt)               in               addition               to               an               overall               decrease               in               tax               revenues               because               of               the               lengthy               recession               and               the               housing               meltdown               have               increased               the               national               debt               enormously.
               But               is               it               time               to               panic?
               Republicans               seem               to               think               not.

Generally               speaking,               many               Republicans               believe               that               nothing               untoward               would               happen               even               if               the               Aug.

2               date               is               reached               that               Geithner               insists               would               be               the               last               day               that               he               would               be               able               to               keep               the               government               solvent.

To               get               to               that               date,               Geithner,               who               has               also               warned               Congress               that               not               raising               the               debt               ceiling               could               send               the               fragile               economy               back               into               recession,               has               resorted               to               extraordinary               measures               like               suspending               investments               in               federal               retirement               funds               and               will               also               cut               back               on               securities               that               go               to               state               and               local               governments               that               help               pay               their               bills.

But               once               Aug.

2               is               reached,               the               government               will               no               longer               be               able               to               meet               its               obligations               and               drastic               measures               would               then               have               to               be               met               to               allow               the               government's               programs               to               continue               to               operate.
               In               short,               once               the               financial               juggling               cannot               continue               and               the               federal               government               is               forced               to               face               its               creditors               and               obligations,               it               will               be               reduced               to               fiscal               spending               cuts               and/or               raising               taxes               to               gain               more               revenue               --               or               raising               the               debt               ceiling.

Not               raising               the               debt               ceiling               at               this               point               will               force               the               federal               government               to               begin               picking               and               choosing               among               its               programs               and               its               loans               that               it               wishes               to               continue               paying,               setting               up               other               loans               for               default.
               By               extension,               this               would               make               the               U.S.

a               financial               liability               among               creditor               nations               and               institutions,               thus               reducing               the               nation's               ability               to               secure               loans.

Such               a               status               has               the               potential               to               devalue               the               dollar,               which               is               the               fallback               currency               for               just               about               every               other               national               currency               in               the               world,               not               to               mention               the               base               for               the               petrodollar               and               the               price               of               gold               in               world               markets.

The               U.S.

dollar               is               the               world's               foremost               reserve               currency               --               and               that               position               could               be               jeopardized.

If               that               should               occur,               the               United               States               could               lose               its               preferred               economic               status               among               the               world's               nations               to               other               currencies,               further               injuring               American               financial               viability.
               But               there               are               11               weeks               for               Geithner               to               juggle               securities               and               suspending               investments.

At               present,               panic               seems               to               be               optional.

But               come               August               a               decision               must               be               made:               Raise               the               debt               ceiling               or               take               the               chance               on               defaulting               on               outstanding               loans,               cutting               billions               of               necessary               (and               unnecessary)               programs,               risk               regressing               back               into               a               recession,               and               devaluing               the               dollar.









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