Guest post by Rick Murphy:
Growing fears of the nation hitting the debt ceiling yet again before the elections
According to the recent reports, the experts fear to warn people that the US government may hit the debt ceiling yet again, possibly before the elections in November, 2012. The US lawmakers were of the notion that the nasty fight over raising the debt ceiling last summer would ensure that this issue never recurred at least till 2013, but the economic activities are bent on proving them wrong. The Bipartisan Policy Centre announced that the doomsday regarding the debt ceiling may come even before November, 2012 leaving the entire nation in a state of shock. While the US consumers are trying their best to live a debt free life, the government is also giving the best efforts to ensure that the budget deficits decrease in order to get back control over the nation’s distressed financial state.
The latest $1.3 trillion increase in the US debt ceiling may not last through the election of November and if this becomes true, this could provide a fresh ammunition for all the Republicans to attack the President, Obama about what they feel is the most vulnerable point – government spending. This entire analysis is based on the present deficit rates and the borrowing estimates and this could make the US Treasury to turn to the Congress for another increase in the debt ceiling. Though the estimates about when the nation will hit the debt ceiling vary among the economists, most of them unanimously agree to the fact that it will increase, now or later.
The Treasury is finding it difficult to cope up with the economic shock as the economy is gradually getting slower due to the worse situation of the Europe’s debt crisis and is also affecting the overall revenue generated by the US. If there is yet another replay of the last summer debt ceiling battle that brought the US at the brink of default, this could rattle the markets and put Obama at the mercy of the Republicans who are bent on cutting down the spending spree of the government.
According to the analysts of the Bipartisan Policy Center, the United States government is poised to hit the $16.5 trillion debt ceiling between late November and January, 2013 due to lower than anticipated corporate tax revenues and the expansion of the payroll tax holiday. The continuous financial crisis in Europe, the volatile gas prices and how fast the US economy continues to grow are some other factors that could push the deadline forward or backward. The2013 fiscal budget proposed by Obama also prefigures an earlier-than-expected deadline. As of September, 30th, the debt level is anticipated to hit the $16.33 trillion and this will be closer to the statutory limit ($16.394 trillion), according to the budget.
The Bipartisan Policy Center members believe that the Treasury could easily avoid the debt limit deadline but only if they use the extra-ordinary accounting measures. The US needs to remain within its credit limit so that they can avoid another messy battle during this already struggling session.
About the author:
Rick Murphy is a contributory writer associated with debtconsolidationcare.com. He holds his expertise in the Debt industry and has made significant contributions through his various articles.