Raising the Debt Ceiling

The “fiscal cliff” was averted, but is America headed to another “US fiscal cliff” size predicament? The debt ceiling is a major issue and needs to be dealt with by White House in the next few months. The debt ceiling will likely move into the media spotlight soon.

America’s Borrowing History
America’s borrowing limit was introduced in 1917 in result of World War One expenses.

Congress has increases the debt limit over 100 times since then and now it stands above $16 Trillion.

In 2001 China owned 79 Billion dollars of U.S. debt. China now owns well over 1 Trillion dollars.

It is no surprise that America’s debt is out of control. To see a live stream of our ever-increasing debt you can visit the debt clock page.

In result of being above the current debt ceiling, if the ceiling is not raised by February or March, the U.S. could default obligations since the Treasury would be so low in funds.

The 14th Amendment
Some people think that President Obama could invoke the 14th amendment which says “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”

If the president does invoke this amendment, it is possible that they will twist it to let America continue to nonchalantly borrow money.

In spite of recent Dollar strength, the long-term forecast for the U.S. Economy is not positive. It is hard to say when the U.S. Dollar’s value will begin to weaken because of all the fiscal matters.

The following two tabs change content below.
Winners Edge Trading was founded in 2009 and is working to create the most current and useful Forex information and training available on the internet.

Winner’s Edge Trading, as seen on:

Winner's Edge Trading in the news