Stephanie's Political Arena

Critiques and Perspectives on National Politics and More

Taping the Cracks in the (Debt) Ceiling

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Wow!  Has it really been nearly two months since I posted anything?!  This summer really has been going by fast! 

To the loyal readers of this blog, I offer my apologies for the hiatus as it has been a very busy summer.  It started off with my youngest brother graduating from high school and moving onto basic training with the U.S. Army, and things have not slowed down since.

In complete contrast to my summer schedule, things have certainly slowed down on Capitol Hill these days as Congressional leaders devote their attention and energy to the federal debt ceiling, and the short-term and long-term implications the final agreement reached between both sides could ultimately have on the financial health of the country… not to mention the global economy.  While a deal has yet to come to fruition, Asian markets are already falling amid fears of the U.S. defaulting on its massive loan obligations.

“With just days to go now before the Aug. 2 deadline, investors who had previously written the impasse off as political games are now going to seriously consider the possibility of a default,” Martin Slaney of GFT Global Markets told The Wall Street Journal

“It is time to get serious about stopping the spending in Washington, DC,” House Speaker John Boehner told Fox News Sunday host Chris Wallace.  He then elaborated on the current impasse between Republican and Democrat Congressional leaders in finding common ground on the “debt talks” between the former’s plan to cut spending and the latter’s plan to raise taxes and extend U.S. borrowing authority through 2013. 

Given my complete lack of substantive knowledge and expertise within the realm of economic and fiscal policy, I would be the very last person I would consult with on government debt negotiations.  However, I do want to point out that when taxes rose under a certain previous administration in Wisconsin, it cost our state close to 200,000 jobs and a number of businesses.  That’s just my small-scale observation to consider within the larger, national picture.

Whether by coincidence or not, Lorenzo Bini Smaghi of the European Central Bank recently published an article in Foreign Affairs titled Avoiding the Next Eurozone Crisis, which focuses on the impact the Greek debt crisis is having on the European economy – specifically the euro – despite Greece’s economy accounting for only two percent of the eurozone’s GDP.  While the U.S. is not part of a “monetary union” per say like the European Union, the strength and weakness of the dollar certainly affects the global marketplace as we’re currently seeing with the Asian markets at this time. 

The Greek example should serve as another testament (if it hasn’t already to some leaders) as to how imperative it is that Washington quickly develop a plan to start reducing our national debt, but without disrupting our still-fragile economy.  And as Speaker Boehner indicated to Wallace today, an election should not factor into such discussions.

In the meantime, I’ll just continue doing my part in at least helping the travel industry stay afloat in this economic environment and during these ongoing summer “debt talks” in Washington… and hopefully finding more time to keep posting updates.


Written by Stephanie

July 25, 2011 at 4:47 am

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