01 August 2007

A New Debt Ceiling?

More bad news--- U.S. Treasury Secretary Henry Paulson said on Monday the government will hit an $8.965-trillion ceiling on its ability to borrow in early October and asked Congress to raise it. "The actions that are available to the Treasury department to take in order to avoid breaching the statutory debt limit would create unnecessary uncertainty for the financial markets and result in costs to the government," Paulson said in a letter sent to Senate Majority Leader Harry Reid and made public by the Treasury.

Gee that is just ducky! Since I am not an economic expert I will see if I have this about right. The way to offset a budget deficit is two prong. The deficit occurs because the revenue is small than the expenditures. To cover this deficit the government can do one of two things--one-it can issue debt like T bonds or it can just print more money.

God forbid that they accutally cut down on spending to bring the deficit down. Right now, thanks to a two front war, the deficit is out of control. But will the next election help bring the deficit into line? Or will it just keep going and the ceiling keeps rising? Better yet, do you really care?



tumbleweed said...

We will still be fighting a war in 2 countries when the next president takes over. The only way to pay for it is to raise taxes or raise the debt ceiling. Look for a bigger debt load.Hell, they may have to raise the debt ceiling and raise taxes to pay for these wars.

CHUQ said...

Personballoy, I am willing to mpay the taxes, raising the ceiling will just put more pressure on my g/daughter down the road.

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