DEBT CEILING DEADLINE.
Make every effort to avoid it
It will be an understatement to say that Americans know that they are facing an enormous fiscal problem, whose outcome will determine how the nation's future finances will be handled to keep it in the "black", and permit it to stay economically afloat for, at least, the next ten years.
It has been in the "red", with an exceeding $14 trillion debt that no single person in the country is happy about.
It has become a situation of making a blunder by any serious investment organization to invest its guarded resources in a country that is swimming in so much debt. The question investors are confronted with is, if the United States is no longer a safe haven for major capital investments, then where else can they go?
A blueprint is required to pull the American economy off the cliff within the next few days, with the deadline set for August 2nd, 2011. Meaning that if nothing is done by that time to overcome the present predicament, the nation will be forced to default on its debt payments.
If that is allowed to happen, it will mean that the dollar will decline in value, interest rates will rise, and the adverse specter of unemployment will raise its ugly head even farther up; making it extremely difficult for everyone to have a normal life.
In other words, the financial landscape will change so much, with Wall Street being in disarray, and corporations cannot plan ahead for fear of more recessions or even a complete stagnation.
Businesses will close, as banks and many financial institutions will begin to spin their wheels in perpetual agony, because they cannot make loans that will place them in good stead. To continue operating under normal circumstances will be impossible for them.
The prevention of a default will be to raise the debt ceiling from where it is now, to empower the government to deal with the diabolical economic quagmire that will ensue after the deadline, if nothing substantial is done, as we speak. Anything else will be "throwing water on an oil fire".
The "Cut, Cap and Balance" proposal by Republicans in the U.S. House of Representatives seems to have had a clear majority vote yesterday; but it does not fit into a balanced approach that Democrats in the House, as well as in the Senate, can support to make it work.
President Barack Obama has his eyes on "the Gang of Six", a bipartisan group, whose aim is to figure out a set of ideas that will be satisfactory to lawmakers, to enable them to pass them (ideas) into law, which he will sign, in order to avoid default.
Let us hope that Washington will seize the opportunity and come together to find a solution to a dead-end situation. They must get to grips with themselves, despite political leanings, and make every effort to enable them to waive off the dismal, financial calamity that is hanging over the heads of all Americans.
They have the backing of all citizens of goodwill to arrive at a sensible conclusion; one which will be in the best interest of the country as a whole.