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| Federal Reserve Chairman Ben Bernanke (from left), Treasury Secretary Timothy Geithner and FDIC Chairwoman Sheila Bair host the first meeting of the Financial Stability Oversight Council last October. |
This post is in reference to the article What A Debt Default Would Really Mean For The U.S. by Scott Horsely of National Public Radio. The article was written on July 5, 2011.
August 2 is the deadline for the current federal budget; if this deadline is passed without further action American finances will be in an even greater bind. President Obama has asked to meet with Congressional leaders of both parties to discuss the federal deficit. If an agreement is not met then only limited incoming cash flows can be used to pay our nation’s bills. The debt default would also increase the interest rates on bonds that are usually sold to cover federal deficits, affecting all American citizens.
The article points out the potential problems that exist if the debt ceiling is not raised but fails to mention the problems associated with the increase. This is possibly hinting at the fact that raising the debt ceiling is one of the only options left for the short-term budget decision. The article is relevant to all Americans because it will affect their everyday life by potentially weakening the U.S. dollar. I thought this article was a good introductory blog entry because of its relevance to the current economic issues we are facing as a nation, the inclusion of multiple parts of the United States government, and the potential impact on the global market.
