Yesterday, the U.S. Nation Debt clock rolled over and topped the $14 Trillion dollar mark! A great way to start the new year as the 112th Congress prepares to be sworn in today and face many serious economic decisions. Not the least of which is further increasing the Debt Ceiling which currently stands at $14.3 Trillion dollars. While some analysts believe the nation’s ‘credit card’ will cover the country’s deficit spending until April, others, including myself, warn that we may hit the Debt Ceiling sometime next month.
Also yesterday, the Federal Reserve Bank held it’s regular meeting and was semi-optimistic. While they concluded that the U.S. economy was improving, it still is not growing fast enough to curb the high unemployment rate. The Federal Reserve will therefore continue to keep interest rates at their low levels and it’s policy of QE2, more ‘quantitative easing’.
The incoming Republican majority for the 112th Congress promises to slash some $100 Billion dollars of Federal spending. While still just a fraction of the $1.3 Trillion dollars Uncle Sugar is over-spending every year since Obama became president, the GOP lawmakers hope that it will be the start of things to come.
This past Sunday, battle lines were drawn between the GOP and the Obama White House on the airwaves during the morning talk show circuit. Barack Obama’s head of the White House Council of Economic Advisers, Austan Goolsbee, warned about “playing chicken” with the Debt Ceiling. His position is that if Congress does not raise the Debt Ceiling, it will have catastrophic results and affect the ‘good faith and credit’ of the United States. Oddly enough, U.S. Senator Barack Obama failed to vote for raising the Debt Ceiling both times he had the opportunity.
Before you shout ‘None dare call it hypocrisy’, Obama is not the only one to blame for our massive National Debt. During her six years as Speaker of the House, Nancy Pelosi has overseen the National Debt increase by some 60%. In the mind of now-former Speaker Pelosi, all of this spending was an ‘investment’ in the American people. I have to wonder further burdening future generations with her $10,000 a night hotel tab in Hawaii this past holiday season was such an investment?
While Austan Goolsbee, Barack Obama’s chief of the White House Council of Economic Advisers wants Congress to increase the Debt Ceiling, the new Republican controlled 112th Congress may have other ideas. Already, many GOP lawmakers are listing conditions for such an increase, such as broad spending cuts and tweaking entitlement programs. With the U.S. National Debt now exceeding $14 Trillion dollars, one has to wonder if it is already too late? Between excessive government spending and the Federal Reserve Bank’s quantitative easing, the ugly head of inflation is making itself seen more and more. Commodity prices for everything from oil to sugar are rising quickly.