Tag Archives: Obama

US Debt A Burden To Future Generations, USA US national security us debt Obama foreign investment fiscal policy debt ceiling

US Debt A Burden To Future Generations

US Debt A Burden To Future Generations, USA US national security us debt Obama foreign investment fiscal policy debt ceilingThe United States of America’s debt jumped by $328 billion this year making the total federal debt now stands at $17.075 trillion. This federal debt is owed by the government but has a significant impact on how the public lives, and how much they give back to the government. The amount the treasury can borrow is limited by the US Debt Ceiling.

Major concerns have been raised about the long-term sustainability of the US federal government’s fiscal policies. In the beginning of 2013, approximately $5 trillion (47%) of the public debt was owned for foreign investors, the largest of which were the People’s Republic of China and Japan at just over $1.1 trillion each.

To make matters worse, according to the Government Accountability Office,

“The United States is on a fiscally unsustainable path because of projected future increases in Medicare and Social Security spending, and that politicians and the electorate have been unwilling to change this path.”

What We Will See In The Future

As the national debt rises, the likelihood of the US federal government defaulting also increases; therefore the treasury will have to raise the debt yield. This reduces the amount of tax revenue available to be spent and what happens is the US has less money to spend on public activities; specifically economic enhancement projects become more difficult to execute.

The other thing that we are going is see is significant inflation. As the rate offered on federal securities increases, investments in companies in the US looks worse. Corporations will then need to start raising the prices of goods and services and hence inflation will likely occur.

The most imperative risk is the risk to the US national security, especially given the significant foreign investment from countries like Japan and China. When there is a risk of the US defaulting on its debt service obligation, they will (and are starting to) lose its social, economic and political power. What will this mean for the future of the ‘most powerful country in the world?’

This issue is a big one, and one that is extremely hard to understand, even for the brightest in our society. What we know for sure is that the US needs to do something about their level of spending and put an action plan together that aims to be more fiscally responsible. I’m nervous for the years to come.

Economy, the greatest enemy of Obama in his campaign for reelection

The weakness of the U.S. economy, marked by high unemployment and the crisis in Europe, is the main enemy of the aspirations of reelection of President Barack Obama and the argument that dominates Republican criticism for its management.

Economy, the greatest enemy of Obama in his campaign for reelection, Obama elections campaign

United States has left behind the most complicated of the crisis, unlike in Europe, and its economy is growing, but slowly and remains the biggest concern among voters, according to all the polls agree.

“For many Americans think that we are still in recession,” because unemployment remains high (8.3%) and a large number of foreclosures, argued Efe Mark Weisbrot, co-director of the Center for Economic and Policy Research (CEPR ).

The slow economic recovery, “whether or not the fault is on the president, it reduces the chance” of being re-elected, according to Stephen Johnson, Center for Strategic and International Studies (CSIS).

However, there are two months before the elections which is on November 6 and if there are “positive indicators” as a drop in the unemployment rate or an increase in consumer spending, the president can draw on them to affirm the economy is going in the right direction.

This was considered by Thomas Schwartz, professor of political science at Vanderbilt University (Tennessee), who nevertheless told Efe that the crisis in Europe may continue to be “a burden” to the United States and “endangering” the aspirations of Obama.

The president is aware that his reelection is closely linked to the country’s economic recovery, which in turn depends on the evolution of the situation in Europe .

Therefore, in the short time he has devoted to foreign policy Obama in this election year has focused on urging European leaders to take steps to address the crisis, as the G8 summit in Camp David (USA) and G20 in Los Cabos (Mexico).

If the situation in Europe “worsens as it did earlier this year, could have an impact in the United States” and out of some undecided voters to Obama, said Weisbrot.

In his view, the Obama economic policies applied against the crisis “were good and helped save about 2 million jobs,” but his stimulus plan has failed to offset the loss of private spending that marked the collapse of the housing bubble and the cut in state and local budgets.

That plan, valued at 787,000 million and released by Obama shortly after his arrival in the White House was “necessary” according to Schwartz, who believes that, on the contrary, the reform set out compulsory health insurance in 2010 adopted “created uncertainty and may have delayed the economic recovery.”

For Johnson, the Obama administration has contributed a slow recovery with increased social spending and making the country “anti-business”.

“In our desire to have a safer country, we have made it more difficult to invest in it,” Johnson told Efe.

Obama recalls in many of his speeches he inherited the deepest crisis since the Great Depression and also that almost all economic measures, as an ambitious employment plan presented last September, have been blocked in Congress by Republican opposition.

By contrast, Republicans claim that the president is mismanaging the economy and its presidential candidate, Mitt Romney, presents his experience in business as collateral to return the country to the path of growth.

In fact, the economy is “almost alone” argument that has used the Romney campaign in their attacks on Obama, since President hoards recognized achievements in security and foreign policy, according to Allan Lichtman, professor of history at American University .

A survey by The Washington Post and ABC released this week shows that 72% of registered voters say the economy will be a “key factor” when they go to the polls.

46% believe that Romney would do a better job to boost the economy, compared to 44% who remained confident of Obama for a second term.