I'm no expert in government finance, but this headline seems incredibly misleading: "Snow warns Congress: US government's cash running out". What Treasury Secretary Snow is really warning Congress about is that the country is about to overtop the debt limit of $8.184 trillion that Congress set by law. How is running out of credit the same as running out of cash? Cash is an asset, but running up debt is just increasing a liability. That's like me complaining about running out of money because my credit cards are maxed -- our country ran out of money a long time ago!
"I am urging members of Congress in the strongest possible terms to resist coupling an increase in the debt ceiling with other issues," Snow said."Rather, they should vote to raise the ceiling this week. It would be unthinkable for them not to take action," he said, warning that the "full faith and credit" of the US government was too precious to be compromised.
Snow has issued increasingly urgent warnings to Congress that the statutory debt limit of 8.184 trillion dollars will be hit this week, and that the government will then lose its borrowing power.
Once the US government reaches the ceiling, it comes under threat of defaulting on its debts and can lose the ability to raise future credit on the capital markets.
So Secretary Snow apparently understands the difference between cash and debt; maybe the AFP should teach a little economics to its headline writers. Maybe someone should teach Congress a little economics, too.
Does it occur to anyone else that there is a point at which the United States will effectively be for sale?
People talk about ways to predict "peak oil", the point at which oil production will reach a maximum, never again to be attained in the future of our planet. Suppose there exists a "peak debt", the point at which foreigners on the whole will choose to consume more from the USA than they invest.
I can imagine a future where the vast majority of US citizens rent everything and own nothing. It's a grim picture. How far away is that day?
Don't expect any fiscal responsibility with one party in control of both Congress and the Presidency.
Now if only fiscal conservatives would act at a level consistent with their rhetoric and put enough Democrats in power to keep the Republican spending machine at bay, maybe we can approach the idea of fiscal restraint in the federal government.
The debt ceiling is $8.184 trillion. Treasury Sec. John Snow wants Congress to increase it.
There are approximately 298,306,393 people in the US.
Your personal share (and my personal share, etc.) of this debt works out to be approximately $27,435.
Mark: Yeah, that's a lot. Especially since our "progressive" tax system means that I'll actually end up paying a lot more than my share.
MW: That would be true if the government only spent what it collects in taxes from the citizenry. As we're all painfully aware, though, the government spends *far* more than it collects in taxes.
So while you'd probably pay more than $27,435.. it may not be that much more.