Post by Hera on Oct 15, 2013 11:34:24 GMT -7
America was once the world’s model democracy. Now it’s a global laughingstock with a government that can’t keep the lights on and is threatening to renege on its debts. How did this happen?
A lot of voters blame whichever political party they hate the most for the government shutdown and the looming debt-ceiling battle. But the seeds of the latest fiscal smackdown were sown almost a century ago, when Washington needed to raise a lot of money fast to finance World War I. In 1917, when Congress enacted new limits on the amount of debt the U.S. government could issue – a “debt ceiling” – it made federal spending easier, not harder, because it eliminated the need for Congress to approve every debt issuance one by one. Today, by contrast, the routine need to extend the debt ceiling has become a negotiating ploy, with politicians disrupting federal spending as a way to gain leverage on other policy issues.
The Treasury Department says it will run out of money around Oct. 17 if the federal borrowing limit, which is currently about $16.7 trillion, isn’t raised. Congress has raised the debt limit 18 times during the last 20 years, but what’s happening now is basically a rehash of the 2011 debt-ceiling standoff, in which Congressional Republicans demanded deep spending cuts in exchange for a vote to raise the borrowing limit. That dispute was resolved at the very last minute, but the political brinksmanship led to the first-ever downgrade of the U.S. credit rating and a stock-market swoon that lasted for six months.
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Check out the complete story:
news.google.com/news/section?pz=1&cf=all&ned=us&topic=ir&siidp=ba80ce4f43e87e07c9c3b031e7019c1fa5fc&ict=ln
A lot of voters blame whichever political party they hate the most for the government shutdown and the looming debt-ceiling battle. But the seeds of the latest fiscal smackdown were sown almost a century ago, when Washington needed to raise a lot of money fast to finance World War I. In 1917, when Congress enacted new limits on the amount of debt the U.S. government could issue – a “debt ceiling” – it made federal spending easier, not harder, because it eliminated the need for Congress to approve every debt issuance one by one. Today, by contrast, the routine need to extend the debt ceiling has become a negotiating ploy, with politicians disrupting federal spending as a way to gain leverage on other policy issues.
The Treasury Department says it will run out of money around Oct. 17 if the federal borrowing limit, which is currently about $16.7 trillion, isn’t raised. Congress has raised the debt limit 18 times during the last 20 years, but what’s happening now is basically a rehash of the 2011 debt-ceiling standoff, in which Congressional Republicans demanded deep spending cuts in exchange for a vote to raise the borrowing limit. That dispute was resolved at the very last minute, but the political brinksmanship led to the first-ever downgrade of the U.S. credit rating and a stock-market swoon that lasted for six months.
-----
Check out the complete story:
news.google.com/news/section?pz=1&cf=all&ned=us&topic=ir&siidp=ba80ce4f43e87e07c9c3b031e7019c1fa5fc&ict=ln