The United States Debt or Alive? Essay

1912 Words8 Pages
Countries around the world are facing a dramatic recession, which is forcing them to spend capital they do not have. There are few sovereign states immune to the financial deficit that seems to even plague world super powers, such as The United States. This is unnerving due to the power and influence that the United States holds on the world stage. No matter how frugal the future budget may be and regardless of future financial success how will the United States overcome a deficit of 14.7 trillion dollars? Regarding this harsh reality there are two factions, one which believes the deficit is a necessary evil. The other believing that a deficit so large can be nothing but malignant to the contentment of the American common welfare. The…show more content…
The Fed was originally created to prevent the supply of money and credit from dissipating. In the United States today the Fed controls monetary policy. Monetary policy is the process by which the monetary authority of a country, controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability (Unknown). When the United States is smitten-ed by debt the Fed has the ability to lower interest rates. When interests rates are lowered, it encourages people to acquire loans and make acquisitions. The short run effect of this cycle can be positive, the long run may not be as positive. When handled erroneously the long run of inflation will be negative. In the short run when people secure loans, the loan enables the person purchasing power, which may help their finances. If the individual receiving a loan does not financially dispense their loan wisely, that individual can be in a arduous financial problem. A dire financial problem can be the possibility of becoming bankrupt, which leaves the person in a situation that is extremely difficult to over come. Debt is not necessarily abominable, apprehending the situation can be very advantageous.
Raising the debt ceiling allows the U.S to pay back their debts, which in the long run has a positive effect. Failure to raise the debt ceiling would mean (denote) the federal government would have to make decisions as to whom would be
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