The Debt Ceiling: Why it Hurts America
In 1917, the United States Congress applied the concept of a "debt ceiling". Prior to 1917, Congress had to directly authorize the amount of each borrowing. The debt ceiling was put in place to provide more flexibility to finance the US involvement in World War I. After the application of the debt ceiling, the United States Treasury could borrow any amount needed as long as it keeps the total at or below the authorized ceiling. I believe a debt ceiling is a very necessary component of American politics as long as it is used correctly; however, it has been abused by frequent increases, and should be monitored more effectively.
On August 2nd, 2011, the date estimated by the Department of the Treasury that the borrowing of the US would be overextended; President Barack Obama signed the Budget Control Act of 2011 into law. The Control Act of 2011 increased the $14.3 Trillion debt ceiling by $2.1 Trillion dollars.
The United States debt ceiling is way too high. It is important to keep the amount of money we are borrowing to a minimum to maintain our good credit ratings. Instead of raising the debt ceiling, I believe President Obama should have cut spending and reduced the deficit as much as possible. Four days after the Budget Control Act of 2011 was signed into law, the credit-rating agency Standard & Poor's downgraded the credit rating of US government bond for the first time in the history of our country. All around the world as well as the three major indexes in the US then experienced their worst week since the financial crisis of 2008 with the Dow Jones Industrial Average plunging 5.6%, 635 points in one day.
The United States government does not need any more debt. Just like every family in America knows, sometimes you have to limit your spending when times are tough. Unlike our President, who insists on spending as much money as possible, just letting the next generation take on the load of debt. It was not in...
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