A Nation Held Hostage

           The US government has had a triple A credit rating since 1917, but thanks to the recent uncertainties in US Congress, the world’s most secure security is at risk. US definitely don’t have any liquidity issues, as of now, but a non payment of a single bill even on a technical grounds, is enough for a downgrade. The debt ceiling drama is nothing but 536 so-called ‘responsible citizens’ of the country, holding the nation hostage. Is it open democracy or economic militancy? Not to mention that this is happening in the worlds oldest and most developed of democracies. I was so naïve to think that this kind of blackmailing only happens in the developing democracies!

            How else would you describe the recent spat between Republicans and Democrats over the debt ceiling? The ruling party wants to increase the ceiling ASAP, so that there is no Economic Armageddon, so to speak. They also want to increase taxes and keep the status-quo of unleashed government spending. On the other hand, the opposition wants to first get the President to sign on the much needed (in there words) cost cutting measures and not touch the taxes. They think that the issue on hand is of debt and not taxes.

            As of May 16th, US government has already crossed the current debt ceiling of $14.3 trillion. The debt that is going on now is to officially get the approval of the Congress to go over the limit. On Aug. 3rd, Treasury will take in $12 billion. But it will have $32 billion in expenses with the 25 million Social Security checks totaling $23 billion due out that day making up about 72 percent of the total*. (BPC)

              According to Bipartisan Policy Center (BPC) for the full month of August, the federal government will have the projected revenue of $172 billion, but will have projected expenses of $306 billion. Following tables by BPC explains the Federal governments August financials in detail:

Programs that might be funded in August:
          

Program	Cost
Interest on Treasury Securities	$29.0 B
Social Security Benefits	$49.2 B
Medicare/Medicaid	$50.0 B
Defense Vendor Payments	$31.7 B
Unemployment Insurance Benefits	$12.8 B

Programs that might go unfunded in August:

Program	Cost
Military Active Duty Pay	$2.9 B
Veterans Affairs Programs	$2.9 B
Federal Salaries + Benefits	$14.2 B
Dept of Education	$20.2 B
Food/Nutrition Services	$9.3 B
Dept of Labor	$1.3 B
Dept of Justice	$1.4 B
Dept of Energy	$3.5 B
Health & Human Services Grants	$8.1 B
Federal Highway Administration	$4.3 B
Environment Protection Agency	$0.9 B
IRS Refunds	$3.9 B
Small Business Administration	$0.3 B
Federal Transit Administration	$1.3 B
HUD Programs	$6.7 B
Other Spendings	$52.8 B

Source: Bipartisan Policy Center

On Congress we Rely...

*http://www.washingtonpost.com/blogs/post-partisan/post/danger-of-default-bachmann-and-palin-dont-get-it/2011/03/04/gIQA3GZLEI_blog.html