As Washington continues to spend far beyond its means, uncertainty about the future of our economy is stifling the ability of businesses to plan for the future. When businesses owners are dealing with uncertainty, they’re less likely to invest and grow. This puts a strain on the job market.
Our new video takes a closer look at our jobs crisis and asks: what can Washington do to put Americans back to work?
Get the facts, click here to download the cheat sheet.
Meanwhile, Washington’s spending has driven pushed our economy to the brink. The government has reached its legal limit to the amount it can borrow as lawmakers continue to work toward a compromise on the debt ceiling.
So, what’s at stake? We go beyond the headlines for all the facts you’re not hearing about the debt limit. Watch the video below.
For more information on the facts in the video, see the fact sheet below.
RAISING THE FEDERAL DEBT CEILING
Washington is a buzz about our nation’s heavy debt burden and the impending debate regarding the debt ceiling. Many in Washington insist that the debt limit must be raised, or the United States will default and send our economy into a downward spiral. But are these predictions based on facts?
WILL WASHINGTON DEFAULT?
History
Will Washington Default if We Do Not Raise the Debt Limit?
The Real Risk
History
The debt ceiling, which is the legal limit on borrowing by the federal government, was created to control and limit Washington’s spending and debt. It hasn’t worked.
Since 1940, lawmakers have increased the debt ceiling 100 times (i). And as spending exploded over the last decade, the ceiling has been raised 10 times (ii).
This overspending has saddled taxpayers with a debt of more than $14 trillion (iii), which is nearly the size of our entire economy.
Will Washington Default if We Do Not Raise the Debt Limit?
Yes and no. Washington could actually hold off on raising the debt ceiling for months (iv), before default or being unable to repay our lenders becomes a serious risk. Like a person with credit card debt, our government won’t default on its debt so long as it can continue to pay the interest payments on that debt.
And the US’s $2.2 trillion in tax revenue more than covers the $200 billion in interest owed this year. If Washington had to, they could pay for all of its bills for months by doing things like selling unused assets, shifting cash around and borrowing money from the Fed that doesn’t count toward the debt ceiling.
The Real Risk
But, that’s only a band-aid to buy us time for real reform — and it hides the real problem. Revenue still only covers 60 percent of the total bill. Unless spending is cut, we risk defaulting under an excessive debt burden.
The debt ceiling keeps increasing because of years of government overspending. Spending has increased well above its healthy historic average and, without reform, will shoot up dramatically (v).
If we really want to prevent more debt ceiling increases and defaulting on our debt, Washington should worry less about whether we have to raise the ceiling in the next few weeks
Sources:
(i) The Atlantic: The US Debt Ceiling, A Historical Look. April 29, 2011.
http://www.theatlantic.com/business/archive/2011/04/the-us-debt-ceiling-a-historical-look/238061/
(ii)The Fiscal Times: Words Fly as Debt Ceiling Closes in on Ryan, GOP. January 6, 2011.
http://www.thefiscaltimes.com/Articles/2011/01/06/Words-Fly-as-Debt-Ceiling-Closes-in-on-Ryan-GOP.aspx?p=1
(iii) Department of Treasury: Debt to the Penny. April 29, 2011.
http://www.treasurydirect.gov/NP/BPDLogin?application=np
(iv) The Wall Street Journal: Congress Has Time and Options on Debt Limit. February 2, 2011.
http://online.wsj.com/article/SB10001424052748703445904576118533071051152.html
(v) The President’s FY12 Budget. http://www.whitehouse.gov/omb/budget
I personally feel that it is way past the time when our gov`t officials should spend like we have to if you don`t have it you don`t spend it.
I can not believe the benefits we give to our officials after thier term is over. Insurance , yearly salary, life insurance. We dod not even get those items for working our butts off.
Congress and the Political stage of Representatives and Senators are corrupt and on the take with illegal activities, contributions and literally (_BEGGING_) people for donations. It’s against the law to beg and solicite money from people but Congress, Senators, Representatives and the President of the United States have been getting away with it every day for decades and when it suits them they they move Congressional districts so they can get more votes to keep they’re jobs. In this Modern Age the President of the United States would be considered Al Capone and the Homeland Security and C.I.A. would be his mobsters and book keepers. President Bush lied to Congress so he could go to war. President Obama didn’t come out with his Birth Certificate for three years. In three years as the most Powerfull man on the face of the Globe I would think he would be able to forge a legitimate document from Hawaii. Then when they went in to kill Osama Bin Laden. They sure were truly deceptive in they’re tactics to keep a lot of information from the U.S. Citizens. Like Osama Bin Laden wasn’t armed but they had him and they couldn’t take him alive even after they shot his wife in the leg and there he was just as ready to be taken into custody as a newborn bullet. Then, they rushed him out to an aircraft carrier and was immediately buried at sea. Give me and all common Americans a break. Why in hell would anyone do that when they should have brought him back to America. Because President Obama is Al Capone. That’s why! They should take scuba divers over there and resume that body to bring it here. This is all just another cover up just like the John Fitzgerald Kennedy cover up. This President was what, about 30% in the polls of being re-elected. So, he had to come up with something fast to get his re-election numbers back to at least half way so he and his mobsters concocted this ramification to keep him in favor with the public. Another thing Homeland Security and the C.I.A. did as mobsters was that they (SPIRITED) Osama Bin Laden’s brother out of this country from a multi-million dollar mansion in Orlando Florida. He’s the biggest connection to Osama Bin Laden in the first place so why would they do that??????????? Why wouldn’t they put him in prison and do they’re thing with him to get Osama Bin Laden and why wouldn’t they take all his money and his multi-million dollar mansion, instead??????? I tell you all that Congress and the Presidential Executive Office has been corrupt for a long time and it’s time to arrest these people, RIGHT NOW!!!!!!!!!!!!
Though you may have a point, I refuse to listen to anyone who can’t tell the difference between “there”, “they’re”, “their”, and “there’re”. Nor will I pay any attention to someone whose main vocabulary word is “like” used indiscriminately. Learn to communicate, and people will know what you are talking about.
And we watch this, and do what??? Do you really think the government is going to listen and learn??? If someone has a concrete solution..present it and give us something to act on.
If the government had a clue it would take drastic action to address the debt.
1. Reduce all spending across the board by 20 per cent. This includes all federal employee salaries including congress and the senate. This could also be implemented by furlough days each month.
2. Reduce all departments of the government by 25% through attrition. As job positions become vacant they are not filled and responsibilities are divided up among those that are left to do the work.
3. Increase the tax on the rich. Millionaires should pay 40 per cent, Multi millionaires 45 per cent, and billionaires 50%.
No more loopholes.
4. Increase tariffs on all imported products to level the playing field for domestic manufacturers.
5. End all subsidies to petroleum companies immediately, and any other companies that are showing a profit of more than 6 per cent.
These five items seem drastic but it now is time for drastic measures.
The ship is sinking and we must stop the flooding before it is too late!
pteates, I agree with your general premise that drastic actions are required, but you fixes are fundamentally flawed in multiple ways.
–I agree with drastically reducing spending–but not a 20% across the board. Many things should be cut 100%; other maybe only 1%.
–I agree that attrition is an effective way to reduce gov. departments. But (1) this takes time, and by then we might have another Obama, undoing what little gains have been made. (2) Gov. dep. are already notorious for being inefficient and backed up in their work. A better solution would be to get rid of the vast number of regulations that these gov. departments have to oversee. If there is less work assigned to these workers, then there is less need for the workers–and we can cut their jobs immediately, without negatively impacting work load.
–Increasing taxes on the rich is the worst possible idea–unless it is done through a fair-tax or flat-tax system that simply taxes expenditures. Then, those who buy the most will pay the most. But (1) if all the rich were taxed at 100% it still wouldn’t solve our debt problem. (2) the more the rich are taxed, the more they shelter their money in investments outside the U.S. We’re in a global economy, and the U.S. already has one of the highest tax structure for businesses in the world. So if you’re a rich man looking to invest, why in the whole world would you chose to invest your money in the U.S.? The real solution is to create an inviting environment for businesses to invest–and that means lower taxes, a more stable political environment (so that businesses can predict what will happen in the future–and have the confidence to invest), and FAR FEW regulations so that the cost of doing business isn’t so outrageously high.
I think every single federal regulation should be abolished and we should start over from scratch–reimplementing only the most critically important regulations. When this process is finished, we should have maybe 1-5% of the current number of regulations on the books.
–On the one hand, tariffs on imports was one of the first things that Hoover did which negatively impacted the economy and helped lead to the 1st Great Depression–as opposed to Obama’s Great Depression. But on the other hand, it is clear that countries like China are engaged in unfair business practices that give their country a distinct advantage over America companies trying to compete with them. So I do not disagree that could selectively place tariffs on those countries that are “not playing fair”.
–First, reducing all companies to ANY amount of profit is a guaranteed way to destroy the economy. (1) Not all companies are the same. A company based on the model of a grocery store–that sells millions of dollars a year can afford to make only 6% profit, but a company that only sells 100,000 a year can’t exist on a 6% profit.
Let the market dictate what profit a company can make–and if a company is making too much profit, another will undercut them to get a larger share of the market.
Second, In order to end subsidies for oil co. those companies have to be getting subsidies in the first place. Oil companies DO NOT receive subsidies–but GREEN companies, like GE do. In fact, GE received so many tax credits that they literally paid NO TAXES at all. And why? Because GE donated millions of dollars to Obama’s campaign. That’s the only reason they get these REAL subsidies–that none of the liberals ever seem to complain about.
By contrast, .42 of every dollar we spend at the pump goes towards taxes–while only .08 goes into the pockets of the oil companies. Keep in mind that the gov. does absolutely nothing to help get the oil to market. Just the opposite–the gov. seems to hinder this process at every step along the way. The oil companies have to spend billions of dollars to buy the leases required to explore an area just to see if it might have available oil on it. Then they have to spend many millions more fighting the liberal environmentalists for a few decades, and then billions more to build the infrastructure for drilling. And after spending maybe half a trillion dollars (on one sight) the liberal environmentalists can come in and shut them down on a virtual whim. There are a number of sites where many hundreds of billions have been spent, with no results, because of gov. (and environmentalist) interference.
Bottom line, while I agree with you on the basic premise–I strongly disagree with you on the best way to get this done.
It is time for the federal gov to participate in the recession like every one has. Washington is broken ,therefore states rights needs to be returned to the states.
Whistling past the graveyard….Unfortunately for those whose ears can hear, it is more than blaringly obvious that relativism, celebrity infatuation (idol worship?) and sports cult have replaced all rational thought. All the while selling us ‘white picket fences and little pink houses’ by the pound, on credit, representing money that has no value. Ah, we’re livin’ the Dream. But The American Dream has become a Nightmare that once we’re awake, it will be too late. As if whistling past the graveyard will make it all come out right.
How do you fight 700 people in Congress and all the lobbyists and ohter organizations that want contributions for everything from saving Social Security to Campaign Contributions? This country is so DIVIDED that we are very vulnarable and exposed to corruption and greed in the United States of America.
I am SOOO SICK AND TIRED OF WASHINGTON SCUM!!… GOVT SUCKS AND IS BROKEN… NEEDS TO BE REPLACED IMMEDIATLY!!.
I stop spending when I don’t have the money. AND stop buying things I don’t need. Why can’t we stop paying congress and our representatives and use the computer, which every american can have access to, and vote on items ourselves. I’ve seen them watching and playing games when they should be working. What a waste!
Margaret, you sound like me, although I’m sure you are not 88 years old. We run our household the same way…we don’t spend what we don’t have. If we buy something with a credit card we make sure its paid for in full at the end of the month. Congress is a waste of money, yes……just don’t pay them when they are not working..that will wake them up real fast. I fear for our country.
Catherine… You say, “just don’t pay them when they are not working.” But frankly, every time they do work they seem to find a way to make things worse. So, if anything, I’d suggest maybe paying them to NOT work. lol.
Didn’t the founding fathers create a mechanism whereby we could hold our representatives accountable for their treasonous behavior????
We need an organization that will take them to court for not upholding the constitution as they are sworn to do. If every caring citizen would give but a dollar it would be possible. Then after one scoundrel was prosecuted – and tarred and feathered – the others would start to do their duty (or cost more to bribe at least… ). Good Luck America.
This whole argument is hogwash. We have ONE problem… political corruption. Get the politicians off the payroll of the corporate interests that fund the political campaigns and these jokers will quit giving away the store and fix the economy.
Our trashed economy was due — 100% — to campaign cash changing hands. Absolutely *NOTHING* will fix our system without getting to the root: political corruption. Politicians sharing in the booty by taking campaign bribes, and then rolling over to the industry that wants in the taxpayer’s pockets. The recent “crisis commission” blamed everyone except the nation’s board of directors — our CONGRESS — even when the politicians are 100% to blame.
The key problem is the way we finance elections. There are only two kinds of money: public and private. Private money got us here and nothing will change until we get these legal bribes out of politics. But a fix is vigorously opposed by the political elite that benefit from the existing corruption.
Nothing else matters, regardless of your issue. Nothing is going to change until we have public funding of campaigns. Politicians spend taxpayer dollars because they ARE PAID to spend taxpayer dollars, and robbing the SSI fund and Medicare (as just two examples) gives them the cash needed to attract campaign dollars.
Our problem is NOT government, and it is not R’s or D’s. It *IS* that government is owned by CEOs and corporate interests that want in the taxpayer’s pockets. The 2010 elections were funded by just 1% of Americans, when they should be financed by 100% of taxpayers. And at $5 per taxpayer it would be a bargain. Even at 100 times that.
CEOs want short-term profits to increase their already massive salaries, and are willing to share those profits with the politicians that made it all happen. Thus NAFTA and other laws are passed that enable outsourcing to countries with wage scales one-tenth ours. Or are repealed (like Glass-Seagall) to enable the Fat Cat bankers to rip off the public. And all while deregulation crashes our country, China and India flourish.
In addition to public funding of campaigns, politicians must also (a) be put on a pay-for-performance basis, where if deficits or pork barrel and special interest spending go up, their pay goes down, and (b) they must put their own wealth in a blind trust that blocks political insider trading (which today is rampant). They must also get their health care from Medicare and their retirement from Social Security, and receive it only when they reach 67 or 69 or whatever age the rest of us qualify.
As a former CEO my company would not have survived if I had an employee or board of directors who took money on the side and gave away company assets in return. Our country can’t survive this corruption either.
So the voters change nothing. We elect a new group of politicians and the Fat Cats simply re-direct their bribes as we continue down our spiral. But the problem is that all of these changes must be made by the foxes themselves (congress).
The public’s choices are simple: a 100% turnover of politicians until the above fixes are made, or a national revolution is inevitable. And all because our politicians refuse to stop the bribery they benefit from, and the public refused to stop it.
If politicians are going to be beholden to their funders, those funders should be the taxpayers. We MUST demand that our senators and representative pass the bill at: http://fairelectionsnow.org/about-bill
Jack Lohman …
http://MoneyedPoliticians.net
The republican side of the GOP is out of touch with the the people. They need to remember how they got there. I can’t belive that how our goverment is not accountible. Our founding fathers are turing over in their graves.
Washington Jobs Program?? I’m beginning to think it’s going to be Endless Wars.
REPOST:
They should not be paid period. They are to be public servants, accountable to the public for whom they are to serve. Compensation should be determined proportionate to availability within the budget after providing for the social welfare of the country. The standards to which they are held should be higher, not lower, and the standard by which they are to subsist should be a standard… that is proportionate to the median income, not the elite. They should be stripped of all corporate ties and of all private wealth. Then they should be allowed to serve, with transparency and accountability. They should be governed as they govern, they should be imprisoned for their crimes. they should be made to live with the poor and walk in the streets of the destitute. They should be made to dress in common clothing and to eat common food. They should have to walk rather than drive. They should be given no special treatment whatsoever and their travel should be dictated as necessary by the people, with personal and professional expenses published in a standardized format available for all to scrutinize. They should be made to answer to a citizen panel for their actions on a weekly, monthly, and annual basis. They should live paycheck to paycheck and their children should attend public schools. They should have to serve the country by showing their willingness to put themselves and their loved ones on the front line of any conflict or war into which they are willing to sign away the lives of their countrymen. They should be willing to partake firsthand in the bloodlust and murder that they agree to each and every time they sign the death warrants of hundreds of thousands of innocent people in other countrys. They should be stripped of the pride and arrogance that they carry when they look down their noses at their fellow men and women and they should be addressed only as servants, with respect and dignity equal to that which they give. To serve is not such a bad thing at all; it is an honor, but only when it is done honorably.
That last comment was in answer to the question: “Should Congress get paid if the Government shuts down?”
seems like a crock of s#*t to me because there was no mention of trade policy which is the real reason for job loss
the first comment was referring to the Unemployment video. Understanding the Debt Ceiling was okay until the end when the matter was solely framed as a spending problem and failed to address the revenue problem which is the other half of the picture/story. Lies of omission are still lies.
Yes we need to stop so much over spending by the government but at the same time borrowing money is what the country has been built on the last 50 years. All of us have debt and in comparison most of us are in over our heads way more than the government is. We all need to take a step back and ask ourselves what we are willing to endure. It’s easy to sit back and say we are over spending on this or that when it doesn’t directly affect you. You complain about not having enough jobs but when the president tries to save thousands of jobs in the auto industry you complain they’re spending to much money. Make up your mind.
Great website…great message!! Keep up the good work. I’m donating $$. The federal spendaholics need this “intervention”…maybe you can fashion an ad with that theme.