The United States of America is facing massive debt problems right now. Even though many Americans are aware of this fact, they don't recognize the true problem behind the massive national debt the nation has. Economists and political figures do not talk about the significance of this huge problem as it will create more problems for the financial system of the nation. And making things even worse may just put a nail in the coffin for the U.S. financial system.
For individuals that don't know, the U.S. has attained $14 trillion dollars in debt. When you read about it you'd want to know how the U.S. economy can bounce back from this national debt problem, but this is simply the tip of the iceberg. This number does not contain the unfunded liabilities that are coming from mortgages, social security and health care plans. When you combine these unfunded liabilities to the present debt, the total debt that the U.S. has is more than $100 trillion. This amount is nothing in comparison to the $14 trillion that the U.S. federal government is openly publicizing.
At face value, individuals immediately recognize that the total amount of debt is mind-boggling and begin to question the means of the U.S. being able to pay it off even after ten years. But the big issue here is, "what are the consequences of this major national debt issue in the nationall"
First off, this will mean greater interest levels on everything such as loans, mortgages, treasury notes and etc. Investing on the U.S. treasury bonds poses more risks now and bond investors need to make sure that they're getting the highest possible interest rates they are able to obtain. The increase isn't obvious right now because of the fair interest rates you are paying. This is because the Federal Reserve Bank is stepping into the picture and purchasing the debts of the Federal Government. Well, the government must do what it can to show that things are under control, but this solution won't last long.
An additional consequence that will arise from the national debt problem is the credit rating. Right now, the U.S. has a triple A credit score which is excellent, but just how long will this last? With the large amount of debt the U.S. has, rating companies are actually contemplating about reducing the credit rating of the U.S. The Standard & Poor's rating system hasn't diminished the credit score yet but has voiced their negative outlook on the U.S. economy. Basically, the U.S. will be receiving a lower credit rating soon.
Exactly why is receiving a lower credit score so bad anyway? When the U.S. credit score goes down from a triple A to something lower, investment companies won't have the ability to buy debts anymore. Not that they don't desire to, but they will be prohibited from buying any debts from a nation with a score less than a triple A. Further, these companies have to sell all the U.S. debts they've purchased before. Once this occurs, the U.S. financial system will be filled with unwanted bonds, worthless treasury notes, sky- high interest levels and a worthless currency. Indeed, the U.S. financial system is in serious trouble right now and something needs to be done to fix it. US Consumer Debt Continues to Rise Causing Many to File Bankruptcy
Lately you can't turn on the TV without hearing about the fiscal cliff that the government is about to fall off of. Depending on who you listen to it seems like the apocalypse is coming if Congress won't sign on to more debt to continue running the Federal Government. Very few of those in Congress are even talking about the spending problem, not the debt problem. Currently, the US government has 16.7 trillion in debt and at the continued rate of spending that number will go over $22 trillion by the time the president leaves office in 2016. Right now the budget deficit is over $1,090,000,000,000. This is how much the government spends over what it has coming in. If any of us ran our households like this we would have to file bankruptcy every year if we could. The bottom line is the US government does not have a debt problem but a spending problem and until they can reduce entitlements and the size of government, will they ever be able to get the debt under control.
Not only has the government got themselves in hot water by overspending it seems that the American public is once again on a spending spree. Many experts have wondered why the bankruptcy filing rate of Americans has dropped over the last two years to around 1.3 million when they thought it should be increasing. The media seems to think that the financial recovery has begun and the financial meltdown of 2007 is now far behind us. In reality, people aren't going back to work or at least to jobs that make a substantial amount of income. All the employment that has been created is that of minimum wage jobs. The reason I believe that less people are filing for bankruptcy is due to the fact that the banks are once again loaning money recklessly. Sure, it's harder to get a home loan but it's easy to get credit cards. Americans are once again trying to be optimistic about the economy and borrowing money they will have trouble paying back. This last week the Federal Reserve reported that consumers have increased their borrowing by $14.2 billion from September to October 2012. This increased the total consumer debt to $2.75 trillion.
With all this bad news it's obvious that many people will have to file bankruptcy in 2013 and beyond. Many Americans are barely holding on and going through all of their savings to continue kicking the can down the road. It would be much better if they would consider the possibility of filing bankruptcy and wiping out all of this debt. While filing bankruptcy carried a stigma that made many people avoid it, the topic has now become mainstream as many have had to file bankruptcy in the last few years. There is nothing wrong with the person taking advantage of getting the advice of a bankruptcy attorney even if they don't end up filing. A bankruptcy attorney will usually educate an individual and let them make the decision to file bankruptcy or to select another path. The important thing is to be proactive in these tough financial times.
For individuals that don't know, the U.S. has attained $14 trillion dollars in debt. When you read about it you'd want to know how the U.S. economy can bounce back from this national debt problem, but this is simply the tip of the iceberg. This number does not contain the unfunded liabilities that are coming from mortgages, social security and health care plans. When you combine these unfunded liabilities to the present debt, the total debt that the U.S. has is more than $100 trillion. This amount is nothing in comparison to the $14 trillion that the U.S. federal government is openly publicizing.
At face value, individuals immediately recognize that the total amount of debt is mind-boggling and begin to question the means of the U.S. being able to pay it off even after ten years. But the big issue here is, "what are the consequences of this major national debt issue in the nationall"
First off, this will mean greater interest levels on everything such as loans, mortgages, treasury notes and etc. Investing on the U.S. treasury bonds poses more risks now and bond investors need to make sure that they're getting the highest possible interest rates they are able to obtain. The increase isn't obvious right now because of the fair interest rates you are paying. This is because the Federal Reserve Bank is stepping into the picture and purchasing the debts of the Federal Government. Well, the government must do what it can to show that things are under control, but this solution won't last long.
An additional consequence that will arise from the national debt problem is the credit rating. Right now, the U.S. has a triple A credit score which is excellent, but just how long will this last? With the large amount of debt the U.S. has, rating companies are actually contemplating about reducing the credit rating of the U.S. The Standard & Poor's rating system hasn't diminished the credit score yet but has voiced their negative outlook on the U.S. economy. Basically, the U.S. will be receiving a lower credit rating soon.
Exactly why is receiving a lower credit score so bad anyway? When the U.S. credit score goes down from a triple A to something lower, investment companies won't have the ability to buy debts anymore. Not that they don't desire to, but they will be prohibited from buying any debts from a nation with a score less than a triple A. Further, these companies have to sell all the U.S. debts they've purchased before. Once this occurs, the U.S. financial system will be filled with unwanted bonds, worthless treasury notes, sky- high interest levels and a worthless currency. Indeed, the U.S. financial system is in serious trouble right now and something needs to be done to fix it. US Consumer Debt Continues to Rise Causing Many to File Bankruptcy
Lately you can't turn on the TV without hearing about the fiscal cliff that the government is about to fall off of. Depending on who you listen to it seems like the apocalypse is coming if Congress won't sign on to more debt to continue running the Federal Government. Very few of those in Congress are even talking about the spending problem, not the debt problem. Currently, the US government has 16.7 trillion in debt and at the continued rate of spending that number will go over $22 trillion by the time the president leaves office in 2016. Right now the budget deficit is over $1,090,000,000,000. This is how much the government spends over what it has coming in. If any of us ran our households like this we would have to file bankruptcy every year if we could. The bottom line is the US government does not have a debt problem but a spending problem and until they can reduce entitlements and the size of government, will they ever be able to get the debt under control.
Not only has the government got themselves in hot water by overspending it seems that the American public is once again on a spending spree. Many experts have wondered why the bankruptcy filing rate of Americans has dropped over the last two years to around 1.3 million when they thought it should be increasing. The media seems to think that the financial recovery has begun and the financial meltdown of 2007 is now far behind us. In reality, people aren't going back to work or at least to jobs that make a substantial amount of income. All the employment that has been created is that of minimum wage jobs. The reason I believe that less people are filing for bankruptcy is due to the fact that the banks are once again loaning money recklessly. Sure, it's harder to get a home loan but it's easy to get credit cards. Americans are once again trying to be optimistic about the economy and borrowing money they will have trouble paying back. This last week the Federal Reserve reported that consumers have increased their borrowing by $14.2 billion from September to October 2012. This increased the total consumer debt to $2.75 trillion.
With all this bad news it's obvious that many people will have to file bankruptcy in 2013 and beyond. Many Americans are barely holding on and going through all of their savings to continue kicking the can down the road. It would be much better if they would consider the possibility of filing bankruptcy and wiping out all of this debt. While filing bankruptcy carried a stigma that made many people avoid it, the topic has now become mainstream as many have had to file bankruptcy in the last few years. There is nothing wrong with the person taking advantage of getting the advice of a bankruptcy attorney even if they don't end up filing. A bankruptcy attorney will usually educate an individual and let them make the decision to file bankruptcy or to select another path. The important thing is to be proactive in these tough financial times.
Tidak ada komentar:
Posting Komentar