Defaulting on the Debt

http://www.washingtonpost.com/politics/as-debt-ceiling-vote-nears-the-pressures-on-house-republican-freshmen/2011/04/15/AFzluIwD_story.html

Here's the next fiscal crisis. The U.S. is deep in debt. The U.S. has been in debt for a pretty long time. Once in a while, the U.S. has to raise its debt ceiling, so that it can borrow more money to pay off debt. This is obviously not good, and a balanced budget could have stopped this trend long ago. Nonetheless, the U.S. has a large deficit, so this trend continues. In the near future, the U.S. will have to raise its debt ceiling again, otherwise it will not be able to pay off its debts, thereby defaulting on the debt.

Many Republicans ran on the concept of fiscal conservatism, or small government spending, and promised to lower or eliminate the deficit, which would reduce the acceleration of the increase of our debt. Many of these Republicans are new, and have not had much experience in office. Ostensibly, it would seem to them that raising the debt ceiling would go against their agenda. Indeed, it might. However, the consequences of not raising the debt ceiling (i.e., defaulting on our debt) include a sharp blow to our economy and the possibility of being unable to fund several government programs. This while we're trying to recover from a recession. It might take some convincing, but I sure hope they vote to raise the debt ceiling. That and balance the budget...

Government shutdown

So you might have heard that the U.S. government has shut down. Well, it didn't. Not gonna lie, it would have been pretty bad. It would perhaps not have been as bad as it sounds, since we still have had a (mostly) functioning government. In case you weren't entirely sure what a "government shutdown is," since our political leaders could not agree on a budget plan (until the last minute), all programs not deemed "essential/excepted" by the Office of Management and Budget would have ceased for the rest of that fiscal year (6 months).

For some Republicans and some Tea Party members, this would have been a desirable result, since it would have been similar to what they would have wanted anyway. No tax increases with major cuts (total cuts, in fact) to everything deemed unessential or unexpected. The things that would have been deemed essential/excepted would have been things that were required to keep the government running such as/as well as Social Security, Medicare, Homeland Security, food inspection, air traffic control, etc. Defense spending could have been cut a little, but the three big uses of government money (defense, medicare, and social security) would have remained unaffected, so even with these huge spending cuts, the problems of the deficit/debt would not have been solved.

So anyway, you might be wondering how we avoided the government shutdown. Read these links:

http://www.washingtonpost.com/wp-dyn/content/article/2011/03/01/AR2011030107063.html

http://www.lasvegassun.com/news/2011/apr/11/shutdown-avoided-time-around-real-budget-wrangling/

Yeah. Temporary solution. Our government now has until March 18 to come up with a real budget.