Debit Ceiling.

The money brought in by the treasury pays government expenses. The current gap between incomes and expenses is about 125 billion a month (CNN Money). The government borrows to cover the gap.  The massive amount being borrowed has discussions on the rise of raising the debit ceiling. The debit ceiling is the limit on the amount of debit the government is allow to issue. The government issues bonds to be repaid at a later date to cover over budget expenses. The government first started issuing bonds and setting debit ceiling to cover expenses for World War I. The ceiling has risen and fell a few times since the war. The current debit ceiling was set in May at 14.3 trillion. The federal debit is measured as a percentage of total GDP. The currents debit is almost 100%. Government officials say that if the ceiling is not raised by Aug.2 the government will not be able to cover all its expenses.  Politicians have been it talks about raising the tax for the rich to generate more income. Several republicans have objected president Obama compromise package because of several tax increases. John Kyl, the Republican whip in the senate, said” Unless the president gets off his absolute obsession with raising taxes, Republicans will not do anything that will harm our economy. Job-killing taxes will harm our economy."  Hopefully some type of agreement and fruitful plan will be issued before the August 2 deadline.

http://articles.latimes.com/2011/jul/12/nation/la-naw-0713-debt-talks-qanda

http://money.cnn.com/2011/07/14/news/economy/debt_ceiling_deadline/index.htm

http://www.guardian.co.uk/world/2011/jul/17/us-budget-ceiling-standoff-default

Goverment Bailout

Shortly after President Obama was mad president he presented a stimulus bailout plain. The bail out plan was ridiculed. Many suggested it was a waste of time and money. However, analysis of the effect of the bail out package reflects a positive outcome. Bail outs were given to major companies like JP Morgan, Goldman Sachs, and Chase. Without the bailouts evidence shows that the previously listed companies and many more major financial institutions would have collapsed. Profits have already been made from bail out money and several companies that received bailout have already begun to pay the government back.  The bail out has reflected a 102 billion dollar difference in profit that the Feds turn over to the Treasury. Profits for the government from the bailout money are made from the securities and shares it purchased to help stimulate the economy. The feds also collected 15 billion in fees related to bail out monies. Many people felt that the bail out was a wasted and tax payers would never see a return of the monies because of major bailouts given to Freddie Mac and Fannie Mae. However surprisingly, Freddie and Fannie have been successful pay back bailout money. Although the average Joe may not see the direct influence or receive direct benefits from the bailout we all are benefiting as a whole. Without the bailout, clear evidence shows we mostly would have been in The Great Depression ll.

(http://finance.fortune.cnn.com/2011/07/08/surprise-the-big-bad-bailout-is-paying-off/)

Tuition Fees increase

Economic news has been blazing with the nation wide tuition hikes that are being implemented.  It is unconstitutional for a state to run a deficit budget; so, they must make adjustments to balance budgets.  The unbalance budgets of several states have caused rash and harsh increases in the cost of education. Public Universities are being hit the worst having to pass more expenses down to students.  An example of the extreme price hikes are the tuition fee seen in the state of Arizona. Four years ago tuition at the university of Arizona was $5,037 starting this fall tuition will have had a 100% increase and will be $10,035. The cuts to education are direct effects of the recession. Since 2008, 428 million have been cut from Arizona’s education budget.   To weaken the severity of our recent recession, the government issued stimulus packages to public universities. The funding will decease for Florida this year. Florida Universities now have to somehow find funding to cover the 140 million that was received in previous years. To cover theses losses Florida State Universities have hiked tuition 15%. I feel that students that have displeasure with increasing tuition fees should take action. Decisions on state budget are made by state politicians. For students to make changes to the way the budget is divided, students have to vote and know what those politicians’ goals are. Voters have the power to decide how, when, who, and, how tax dollar are spent.

http://money.cnn.com/galleries/2011/news/economy/1106/gallery.in_state_tuition_increases/5.html