August 08, 2011

Debt-Ceiling brou·ha·ha

"What's going there? What is it about?",  my mom asked me these questions because in the Philippines and all over the world, this is a big news. Well, I'm not expert on this area but reading the paper and watching some debates from both parties, learned some vital things on how it all started. According to our local newspaper, it started on the final years of Pres. Clinton where the federal government was running a huge budget surplus and the national debt was declining relative to the size of the US economy. Then came Pres. Bush time, where congress enacted two big tax cuts that decreases federal revenues. War expenses and prescription drug plan for senior citizens raised the government expenses. Then came the recession, then Pres. Obama's stimulus plans added to the huge expenses resulting to increase in budget deficit and national debt. So the plan is to increase the debt limit to finance the governtment obligations. In comparison to having a credit card, you owed a lot already in your credit card but your present income wouldn't suffice to pay your bills so you need more money and you're running out of cash. One of your option is to request  an increase on your credit limit, so you could spend/borrow more money. Why not spend less, cut some expenses, postpone some plans that will cost you money. I don't know, it seems so basic to me, but politics, power, greed and personal interests are the problems. How disappointing to hear that our President and other politicians are raising funds for their election bid, and the amount of money are enourmous enough to create jobs, etc. The  debt-ceiling deal raised the government's borrowing limit in stages by at least $2.1 trillion and up to $2.4 trillion, while providing a dollar-for-dollar exchange in spending cuts.

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