The clock is ticking in Washington, DC! Yes, the Fiscal Cliff is looming with only a few days left before taxes go up on January 1, 2013. But now our Secretary of the Treasury, Timothy Geithner, is warning about the debt ceiling, the limit of which we will hit on December 31, 2012. You may recall that the debt ceiling was raised in August of 2011 to $16.4 Trillion dollars. Depending how you count, we′re there now! Geithner says that with some creative accounting, he can keep paying the government′s bills through February, 2013. But after that, the United States of America will begin defaulting. Nice way for Barack Hussein Obama to start his second term in office, isn′t it?
Naturally, Obama would like a blank check and take away from the Congress its Constitutional authority concerning spending the People′s Money. Early in the latest Fiscal Cliff talks, the White House insisted on including provisions for the Executive Branch to be able to set the nation′s line of credit. You may recall from two summers ago that following the debt ceiling debate then, America′s bond rating was downgraded for the first time in history. Fitch, Moody′s and Standard&Poors have all said that the lack of any real budget solutions over the remaining days of 2012 could result in further downgrades.
America is not alone in this. We have watched over the past couple of years several European nations having their bonds downgraded to either at or near junk status. The result of which means that such nations must pay higher interest rates in order to sell bonds to fund their spending. Currently, the federal government is borrowing 46 cents for every dollar it spends. Obama has gotten away with such wild spending since interest rates are extremely low, about a fifth of that during the Bush′43 years. If rates were as high now as they were then, the amount of money the federal government would have to spend just to make interest payments on our National Debt would be more than our entire non-military discretionary budget.
The trickle down effect would mean higher interest rates on everything from home mortgages to credit card financing. Talk about an economic standstill! There is no doubt that another recession is in the wings for us, unless, of course, you are among the more rational of us who believe that we never really got out of a recession in the first place. That if anything, Obama and the Democrat policies and dismal legislative performance have actually caused a depression. The only reasons why we are not calling it such is thanks partly to the Federal Reserve Bank and its flooding the market with cheap cash and the Media reporting anything the White House tells it verbatim.
So hold on to your wallets as the United States is about to hit the debt ceiling limit again. Treasury Secretary Timothy Geithner is warning that as of December 31, 2012, America′s National Debt will hit the $16.4 Trillion dollar mark. The Fiscal Cliff will take place the next day on January 1, 2013 if no deal is achieved by Obama and the Congress. The odds are that we are in for a very rough ride come next week.