The United States debt limit or debt ceiling is an amount, fixed by legislation, of the national debt that can be imposed by the Treasury.  Since the different expenditures of the government are observed and authorized by different pieces of legislation, the debt ceiling does not play any role in restricting annual deficits.  And as a result of this, it only restrains the Treasury from paying the debt that has already been accumulated.  In 1917, the United States imposed some legislative restrictions on the debt.  Gradually, some political disputes arose over the legislation that led to the enactment of legislation requiring Congressional approval to raise the debt ceiling.  And although the debt ceiling is reached, the Treasury can still take extraordinary measures to avoid default on debts.  This allows Congress and the President even more time to negotiate a debt ceiling increase.

 

However, the United States has never met the default point, the stage where the Treasury can’t pay its obligations.  If this kind of a situation were to occur, it is unclear as to whether the Treasury would be able to avoid defaults by prioritizing its debt obligations.  But, at the same time, it would likely have to default on at least some of its non-debt obligations as well.  In fact, a default could trigger cascading economic problems like decline in output, stock market crash, recession, and severe financial and credit crises.   Unfortunately, those opposing the current Administration in Congress now routinely use their legislative authority to raise the national debt ceiling as leverage to gain concessions in other areas of contention with potentially serious repercussions.

 

The near-default resulting from the debt ceiling negotiations in 2011 resulted in a downgrade in the credit rating of the United States – producing an increase in the borrowing costs to the Federal government and a sharp drop in the stock market.  With the Budget Control Act of 2011, Congress raised the debt limit averting total economic chaos.   The debt ceiling was also raised without too much controversy at the end of 2012.  On February 4, 2013, President Obama signed into law the “No Budget, No Pay Act of 2013”, which suspended the U.S. debt ceiling through May 18, 2013.  Despite its passage and enactment, on March 1^st, the sequester, cutting 1.2 trillion dollars over the next decade, went into effect due to Congress’s failure to reach a deal to avoid it.  The Treasury adopted some exceptional measures to avoid minimize its impact on provision of necessary government services.

 

Before 1917, the United States had no debt ceiling.  At that time, Congress permitted the Treasury to issue certain specific debt issues for defined purposes and provided authorizations for some specific borrowing activities.  Occasionally, Congress also gave the Treasury discretion regarding the type of debt instrument to be issued.

 

has been a popular writer and blogger with www.getcashpaydayloansonline.com and many more well known sites.  He has been guest blogging for a considerable period of time, writing on topics including law, finance, and debt.

 

 

Imagine, if you will, a horrific scenario in which your beloved grandparents are kidnapped.  You fear for their well-being.  You hope that the call will come, and come in time, instructing you concerning the amount of the ransom and where it is to be delivered.  Most of all, you pray that you have enough money to cover that ransom; if not, the unthinkable will happen.  You check your bank account and your secret stash of cash; you even beg for financial assistance from everyone in your circle of family and friends.  But no one has enough money, even together with your coffers, to rescue your grandparents.

How terrible is this scenario?

Well, it’s worse than you think, for it’s not a scenario!  It’s not a scene from a thriller, and it’s not the stuff of a paranoid mind.  It’s happening right now, right here in America.

Down through America’s history, our political leaders have always safeguarded the interests of our citizenry against foreign threats.  They’ve done so with stern warnings to the foreign powers, with trade embargos, and even with military action.  From the shores of Tripoli to the mountains of Afghanistan, we have been protected from the unthinkable and the unconscionable.  But, our government has done nothing to safeguard us against a threat right here on our own soil, a threat issued by our very lawmakers.  That threat is the theft of our Social Security.

Social Security: that which your grandparents and your parents paid into with their own blood, sweat, and tears.  Social Security: that which the U.S. government removed from your loved ones’ pay checks and vowed to keep safe, so that your family members could draw upon those funds in their golden years, after they had retired.  Since its inception during FDR’s Presidency, Social Security has been sacrosanct.  Never before has it been threatened with a kidnapping and, for all intents and purposes, an astronomical ransom.

Now, for the first time in our history, Social Security will be the first head to roll off the chopping block of National Debt.  Our country is deep in the hole.  And although we have until Tuesday, August 2, 2011 to determine a solution to the problem of our National Debt, the shot has already been heard around the world.  The global economy has already gone into a nosedive as a direct result of our financial tottering.   Much closer to home, however, the senior citizens of the United States of America will be the first and most vulnerable population to suffer from this unresolved debt.

Simply put, senior citizens will not receive what we’d paid into, and what we’d been promised, if our Powers That Be cannot reach a workable consensus come Tuesday.  For a President to even entertain the notion of robbing the elderly to offset a portion of the National Debt, let alone announce this via the media, is disgraceful!  And, despite this mortifying national situation and the very real danger to retired persons, we have yet to hear any of our so-called leaders raise their voices in defiance of such an act.

Where are our statesmen that put country first?  Don’t strain your eyes looking for them, for they are all dead!  Of all the places from which we can borrow from Peter to pay Paul, Social Security should not be on the table as a bargaining chip against insurmountable debt.

Why not put foreign aid into play as a bargaining chip?  If we can afford to give aid to 149 of the 159 counties in the world, and if we halt that aid, those monies would more than satisfy the budget.  Look at the big losers of World War II: Germany and Japan.  They have a better economy than the USA and yet, we insist upon giving aid not only to them, but also to 90% of the world.  As they say in Denmark, “Something stinks here.”

It sure does!

Why is it that our government cannot agree on a solution to our rampant debt?  Well, we have always had adversarial government, that’s why.  Our two-party system is always at each other’s throats, with one side blaming the other and both sides spinning their wheels with no forward motion.  “United we stand, divided we fall” is a nice sentiment, but rarely has it been a reality here.  Robbing senior citizens of the money they need to survive — their own money — is not the answer.

It’s probably too late to save Social Security from eminent disaster.  By the time the budget is saved, how many senior citizens will already have been rendered homeless, literally starving on the streets, due to the incompetence and greed of our lawmakers?

Yes, it will be too late for what our government considers to be a “disposable” population, so what can we do going forward?  I have a few suggestions.

1.  Candidates for Congress and the Senates should have no party affiliation.  They should answer only to the people of their individual States.  The resulting governing body would then select the President and the Speaker of the House from their group.  There would be no need for a Vice President.  In the event that the President cannot fulfill his or her duties, the highest-ranking officer (the Speaker of the House) would replace the President and continue until the term of office comes to a close.

2.  Terms of office should be revised to two years for all offices in government.

3.  The government would fund the costs of elections.  There would be no campaigning.  Each candidate would express his or her views and his or her promises, once, and publicly.  After that, the voters would elect the officeholders.

Over the years, our legislators have become a cadre of fat and lazy robber barons. Paid off by lobbyists representing huge corporations and large special interest groups, our politicians enact certain laws, and blatantly disregard other, in order to pander to those who grease their palms. Meanwhile, the private citizens who actually voted those politicians in are being giving the shaft.

Unless our entire system changes, in some manner similar to the guidelines I have listed above, our current legislators will probably die in office … still fat, still lazy, and still raping law-abiding citizens of their rights under the law!

Forty-four Presidents after the founding of our nation, we stand at the precipice of disaster.  President George Washington is probably spinning in his grave as the great country he’d envisioned goes down the toilet.