Debt ceiling and the federal budget

The debt ceiling crisis of the United States, 2011, refer to the debate in Congress over whether the U.S. should increase the debt ceiling, and if so in what amount. It also discusses what the cost policies in the future, or what required implementing fiscal policy after increasing the debt ceiling. Moreover, this discussion expected to reach important structural reforms to the budgeting process (for example spending limits or amendments to the Constitution in terms of balanced budgets). The total governmental debt amounted to 14.4 billion dollars (trillions in Anglo-Saxon nomenclature) in July 2011, exceeding the spending cap of 14.3 billion. The Treasury Department U.S. has no authority to issue or incur debt beyond this limit, forcing them to carry out the reform (Bernanke, 1).

Despite the lack of authority of Congress, December 16th of 2009 the debt ceiling exceeded, and to correct the problem, the Treasury Department already had to use "extraordinary accounting tools" to provide the treasury 150 billion dollars to meet federal obligations. In contrast to December 2009, in this case the situation considered a potential crisis because the government could be seen unable to meet its financial obligations. The crisis not only affects the United States, but that the threat to other countries whose currency based on U.S. dollars and could be dragged by losses. The certification credit Standard & Poor's filed the note of the national debt in a "negative review" during the crisis, increasing the risk of degrading the note "AAA" national debt (Wright, 33).

The debate has been unusually difficult, with lawmakers of the Republican Party opposed to any increase in taxes and the Democrats argue that a tax increase was as necessary as a cut in expenses. Lawmakers who support the movement Tea Party prompted the Republicans to reject any agreement that would cause immediate and long cuts include or make any constitutional amendment (Taylor, 2). The immediate crisis is over when a complex agreement between the two sides has managed to raise the spending ceiling on July 31. After approval, in Congress and the Senate, ratified by the President Barack Obama as the Budget Control Act of 2011, the August 2 is deadline for the agreement (Bonner, 23).

If the Treasury Department is unable to collect enough money to pay the federal government spending, this may be authorized by Congress, to borrow, that is, to use the money to pay ...