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The US National Debt Level Spirals Out of Control in 2011

by Sandy Thompson (guest author)
As political squabbling continues over ways to bring a restrain on public spending, The
US gradually takes steps to avoid crossing the government’s legal debt ceiling in the first
week of February, 2011. The US Treasury is roughly $279 billion away from reaching
the US debt ceiling that is $14.294 trillion. With the rising US national debt level, more
and more people are running towards debt help companies but despite their efforts, the
debtors can’t meet their monthly payments. According to the predictions of the Treasury
Secretary, US would cross the debt ceiling by March, 2011. The Treasury has taken its
first financial step of cutting the balance of a financial lending program from $200 billion
to $5 billion.

However, compared to the day-to-day borrowing needs of the Treasury, the cut off
balance is like a drop in the bucket. The Federal government has also taken certain
measures like come to terms with the debt crisis in the nation. The government is issuing
short term bills and dismissing all payments to government employee pension funds.
There is mounting pressure on the US government to come up with some efficient deficit-
reduction strategy that could help the nation boost its economic state. Since there is a
danger of the US government defaulting on the loans, there arises a need of raising the
debt ceiling immediately so that there arises no turmoil in the global investment market.

Why the Federal government requires paying its bills

If the debt ceiling is raised in the US, the federal government will again get a chance
to pay off its bills and borrow more money. Those who hold debt of our nation would
feel more confident by this step but this would not address the national fiscal woes. The
individuals also need to be concerned about handling their credit card bills and must not
default on his minimum monthly payments in order to keep a balance in the economy.
Therefore, along with the federal government, the US consumers also require being
careful about their credit cards so that there is a return of balance in the US economy.

The Controversial Debate Regarding the US Debt Ceiling

While the Republicans are threatening to vote against the rising debt ceiling, the
Democratic lawmakers and the White House has agreed to introduce serious spending
cuts in order to witness some positive change in the US economic condition. According
to the Congressional Budget Office, it has been predicted that the government budget
deficit will reach 40% of the GDP under the tax cut deal that is struck by the Republican
lawmakers.

Both the White House and the Republicans are using edgy financial markets to back their
arguments on the raising debt ceiling. The Congressional Republicans are of the opinion
that investors are going to flee from the US market if the debt ceiling is not raised and if
the national debt grows in this level.

Therefore, the US government and the consumers must pledge to get out of debt as
soon as possible. If needed, they must resort to the government and private debt help
companies so that they seek professional help while coming out of their financial
obligations in 2011.