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.
It’s not that surprising to see that kind of amount that our government own. Like you said in the blog, the gap between incomes and expenses is about 125 billion a month which is crazy high. As of May, the debit ceiling is at 14.3 trillion and me not sure how our government plans to pay this kind of amount back. Will the taxes increase? I’m not sure how to answer this but it looks pretty bad in our economy right now and I’m hoping it will pick up.
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