On Monday 16th, the debt ceiling was reached in the United States. To keep from defaulting, the treasury secretary has delayed making investments to two retirement funds in order to pay interest on borrowed money. This maneuver will buy 2 1/2 months time to increase the debt ceiling.
Any move to increase taxes or cut spending before this time will have no effect on the deficit for this fiscal year. The move to hold the debt ceiling hostage by politicians is symbolic. It is to bring light excessive spending of funds that are borrowed. This has been made substantially worse the last 9 years due to corporate tax cuts and increased spending.
Investors are already pulling their money out of United States markets and finding safer havens for investment. Judging by the current enormous inflation rate of at least 5% and the Federal Reserve, printing excessive money to keep the economy afloat, I believe these investments will not return anytime soon. Please see one of my blog ads, thank you :-)
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