OS PINGOS NOS IS – 20/05/2022

We’ve carried a national debt for a very long period of time. Only recently has it reached levels that have started to cause alarm, particularly when looking forward at the next forty years. The question many people have is which party is responsible?

The enormous blunders that nearly crippled the most powerful nation on this planet we call Earth could have and should have been avoided. It was through the less than competent hands of various bankers, politicians, and regulators that major financial decisions were made that proved to be ill fated based on some opinions and downright malicious according to others. The financial melt down was deemed “avoidable” according to the US Financial Crisis Inquiry Commission whose job it was to examine the records and determine cause and who was to blame. All fingers pointed directly to politicians as well as banks and other financial regulators who took risks that were well beyond their pay grade or expertise.

America owes so much money to other countries at some point we will have trouble even paying the interest on what we owe. Whether there is a republican or democrat in office, things really do not change much. The spending and debt keeps on increasing, yet they keep talking about reducing both.

Different economy watchers have different takes on the Egypt crisis. Certainly, we are not likely to witness a repeat of 1956 Suez Canal crisis. It remains to be seen whether Egypt successfully copes with the turmoil and whether the other vulnerable countries take timely corrective measures to prevent an Egypt-like situation.

As the debate continues in Congress about lowering the budget deficit, the debt ceiling is about to be raised again. Because the dollar is still one of the world’s most important reserve currencies, US budget deficits and the Fed’s balance sheet contribute enormously to the world’s debt load. Here are a couple of do-able suggestions to lower the US deficit.