US Treasury Secretary Paulson asks for debt limit increase
Treasury Secretary Henry Paulson has asked lawmakers to increase the government's borrowing authority or the United States may be unable to pay its bills this fall. It is currently capped at $8.965 trillion.
Paulson, in a letter to lawmakers:
"Accordingly, I am writing to request that Congress raise the statutory debt limit as soon as possible." He said the government may bump into statutory default in early October if nothing is done.
Note the fact that the statutory debt limit has been raised several times during President Bush's tenure. The last increase was in March 2006 when the debt ceiling was increased by $781 billion.
What can the Democratic-controlled Congress could do? Basically nothing. No lawmaker wants to see a federal default occur. It would rattle bond markets, force interest rates to go higher and cause an adverse impact on the economy.
But it is a shame that the populace thinks that the country can keep on borrowing money. For fiscal year 2006, the government paid $405 BILLION IN INTEREST PAYMENTS ALONE! For 2007, the government is budgeting $500 billion towards the interest on the national debt.
The Bush administration has defended the increases as essential to pay for wars in Iraq and Afghanistan and to cover other costs to keep the United States secure.
But Mr. President, I thought that if the economy was doing pretty well and government revenues are up, why do we still have a deficit? What if military action is taken against Iran? How much more can we borrow? It seems we can never stop the thirst of spending more than what we take in.
Is it possible that the high borrowing is causing some countries to consider buying euros and pounds instead of the U.S. dollar?
In addition, the administration wants to end Congressional action on expanding its borrowing authority. In essence, it wants a "blank check." Congress must not allow this to happen. This is needed to focus attention on the country's fiscal mismanagement. How can we explain to future generations why we have a $20 or $30 trillion national debt? How can we explain that the country is now owned by Japan and China because they are holding most of the debt?
Seriously, we may think we are looking at the good old times for the next 5-10 years. But in 20-30 years, the fiscal climate will be drastically different. By that time, 75 per cent of the federal budget will be devoted to Social Security. Add the national interest, you got pretty much nothing for domestic programs.
Yahoo News - Paulson: US should boost debt limit
Comments
Posted by: James (Author)
Posted on: July 31, 2007 06:28 AM
I still find it disconcerting for the administration to continue the process of keeping the cost of the Iraq and Afghan wars outside of the federal budget because they are considered to be "emergency supplemental funding." Plus with the government borrowing money from the Social Security trust fund, the numbers are quite misleading.
Honestly, both liberals and conservatives ought to be scratching their heads at this. Could we please have a balanced budget? Where are the fiscal hawks?
Posted by: Internet Marketing Coach
Posted on: July 31, 2007 01:23 PM
It looks like US is going to have a huge deficit after Bush steps down. Thanks to him.
Posted by: bob
Posted on: August 1, 2007 10:12 AM
We should start by abolishing the fed.
http://www.fdrs.org/fed.html
http://video.google.com/videoplay?docid=-515319560256183936
Posted by: Internet Marketing Singapore
Posted on: August 5, 2007 03:27 PM
Yes, I second the resolution to abolish the FED for good.
Posted by: Debt Cures
Posted on: August 19, 2008 04:22 PM
The national debt is horrible and can hurt our economy on a macro-level, but we cannot continue to ignore the oppressive debt that is being accrued on a micro-level, by American families. That debt will destroy our nation like a virus: never seen until it has become systemic. We need congress to wake up to consumer debt and offer some solutions, instead of enacting laws that limit bankruptcies.
Posted by: Faxless Payday Loan
Posted on: August 20, 2008 03:45 PM
The debt situation is getting out of hand. What happened to the balanced budget? Was it really just 8 short years ago that we had a surplus? I'm glad November is coming up quick... we need some new leadership.
Posted by: Improve Credit Score
Posted on: August 27, 2008 11:26 AM
I agree -- I'm ready for a change in Nov. We work with people every day who struggle to balance their own budgets, and go to great lengths to make sure they don't spend more than they earn. You'd think the government could (at least attempt) to do the same thing.
Posted by: Christian Speaker
Posted on: September 16, 2008 05:18 PM
Why does Congress always get a free pass in debates like these? Democrats control both houses of Congress. Should they not be held accountable as well?
Posted by: simmons
Posted on: September 17, 2008 12:21 PM
Nice post about US Treasury Secretary Paulson.......
This info about the Bush administration has defended the increases as essential to pay for wars in Iraq and Afghanistan and to cover other costs to keep the United States secure.............
===================================================
simmons
California Dui
Posted by: milo
Posted on: October 6, 2008 09:54 AM
I cannot wait to see change in Nov, it can't come soon enough, esp after the last 2 weeks! $700 billion, the world really is in a big hole and I for one think it's going to take 10 years to see any light.
Posted by: Jane
Posted on: November 5, 2008 06:19 PM
Well change is here! Congratulations USA President Obama is here. I really hope that this signals the change in our country and foriegn policy.
Posted by: Kevin @ Debt Free
Posted on: February 28, 2009 01:32 AM
Well,
Obama is here, let us hope he saves our country and economy from hitting the rock. I recently read about govt paying people some $8000 to buy houses. As a part of the down payment. That should help, but there are certain problems that I foresee
1. It is only for new buyers.
2. We still need a good FICO to qualify for the loan. As of today 80% of the people might not qualify, as late payments, job loss, unstable economy has affected the credit scores of a lot of people.
I do agree that it is a very good time to invest in property, but you need to have money to invest.
I think it would have also helped if govt made some changes in lending industry criteria. Anyways, it is a good start. Way to go. :)