Borrowing is what causes the National debt. Credit is extended to the government just like a credit card, based totally on the fact that the government raises revenue from taxpayers. There are two parts to the National debt: Public Debt (taxpayers responsibility) and Intergovernmental holdings (federal debt, government departments are supposedly responsible).
When the government’s revenue is not sufficient to cover spending it must borrow money, this increases the National debt. A combination of factors have caused recent record deficits: the economic downturn following 9/11, the war on terrorism, the Iraq war, and huge tax cuts in 2001 and 2003 that dramatically reduced revenue. States, corporations, and some foreign governments in the name of the United States Federal Government causes the national debt when money is borrowed with government collateral in the form of Treasury Bills, notes, and Bonds.
The Civil War caused a great increase in the national debt, growing from 65 million in 1860 to 1 billion in 1863. The debt then grew to 22 billion by 1920 as the US paid for World War 1. Social programs of Roosevelt and Truman also caused a great increase in the National debt in the 1930s and 1940s. By 1950, the US National debt was more than 260 billion. Reagan and Bush caused the National debt to quadruple from 1980 to 1992. Recently George W Bush doubled the debt from 5 trillion to 9 trillion, and is expected to double during the current Obama presidency. The only way to pay down this debt is to pay off maturing securities and not replace them with new ones.
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Since september 28, 2007 the national debt has continued to increase an average of 91 billion per day. Concerned? Then maybe we should be telling congress and the white house.
- Freedom from Debt
Debt is up, trade is down, and we still don’t know which way to look. It does not matter what they say debt is a form of slavery but debt does give us health care, so it is important that we drive down costs. It was said that Obama prodded congress to pass restrictions on credit-card issuers, saying consumers need strong and reliable protection from unfair practices and hidden fees.
“It is time for reform that’s built on transparency, accountability, and mutual responsibility, values fundamental to the new foundation we seek to build for our economy.” The president said. This could also be found in the Business & Economy Directory with a little looking.
Obama called on congress to send to him, by May 25, a bill that would clamp down on what he says; “Are sudden rate increases, unfair penalties and hidden fees.” He also wants the measure to strengthen monitoring of credit-card companies. The House of representatives passed the credit-card bill but not after adding a provision requiring banks to apply consumers’ payments to balances with the highest interest rates first. The bill also imposes limits on card interest rates and fees.
It is important to know that debt is contributing to the general publics’ disenchantment with government. The government is well aware of this and seems to be doing everything within their power to correct the issues as fast as possible. We did not get into this situation overnight and areturn from it will be lengthy.
Will we all survive this? I am sure we will, maybe a little smarter definately credit savy and I hope we all start to live within our means or act realisticly when borrowing knowing we can and will repay our debts.
Running away from debt
How to become debt free? Debt is maybe one of the biggest issues in life, because of which, it seems, a lot of people lose all their senses. For instance: You love shopping, you want to buy almost everything that comes your way, and after all you have a credit card with excess funds on it doing nothing at all but waiting for you to spend them. But because the bill of this credit card has incurred and has to be paid by you only you may find yourself in a pickle very quickly. You can find yourself buried in neck deep debt in no time.
So, the first step to be debt free is to make any spending you do intelligently. Spending done according to your needs and not your hobbies and fashion and toys is an intelligent and wise decision. There can be a lot of things that come along in our consumer society that might compel you to take out a short term loan but again those conditions can restrict you from paying back the loan. However, if your case is genuine and provable, then the government can take care of all your debts, provided you are in need and cannot pay back your debt in time.
For example, due to the economic recession, a lot of businessmen went bankrupt who had accrued vast debts. To help them with their monetary problems the government intervened and helped them to pay off their debts. A lot of grants have been started by the federal government to make sure that people do not become victim of the recession and downturn in the global economy.
The most important thing to do is to keep a track of all your debts and their deadlines. Paying back the debt in time is the wisest act, as it will keep all the financial problems away from you. Understanding your needs and then spending accordingly is always advisable. How to become debt free? Debt is the biggest issue, because of which a lot of people lose their senses. You love shopping, you want t…
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