RICHARD GORDON: “If the federal government does not put money into the economy, the economy will stall. And that will result in another recession, and that cannot help anybody.”
The national debt is more than fourteen trillion dollars. At the end of last year, private investors in the United States held the largest share -- thirty-six percent of that government debt. China was the single largest foreign holder of Treasury securities, followed by Japan and Britain.
On Wednesday, China's Dagong credit rating agency downgraded American debt. It said the budget deal did nothing to improve the United States' ability to pay its debts. Still, the government has had no trouble finding investors, and its borrowing costs have even fallen.
The Budget Control Act calls for almost one trillion dollars in spending cuts over ten years. A committee of six Democrats and six Republicans will have to identify another trillion and a half dollars in deficit reductions.
What happens if the committee cannot agree? Then an enforcement measure known as a trigger would go into effect. It would cut money from domestic and defense programs, but not in popular social programs for retirees and the poor.
The budget deal contained no tax increases, but that issue has not gone away. Richard Gordon -- now a law professor at Case Western University in Cleveland, Ohio -- says the deal leaves a big question.
RICHARD GORDON: “What is going to be the economic policy of the federal government in the next two years?"
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2013-11-25
2013-11-25
2013-11-25
2013-11-25
2013-11-25
2013-11-25