A couple of days ago Speaker John Boehner addressed criticism from democrats who are trying to raise the debt limit (the amount that the US Treasury can go into debt). If we don't cut spending or raise the debt limit then the Treasury is projected to run out of money to pay its interest (or medicare/social security) in mid-August.
“What we – and the American people – are asking for isn’t radical. We want to stop tax hikes that destroy jobs; Democrats want to raise them. We want to stop Washington from spending money it doesn’t have; Democrats want a free pass to spend more. We’re in a hole and we want to stop digging; but Democrats won’t give up the shovel.
“I also want to address those who’d suggest our efforts to cut spending could somehow hurt our economy or hurt the markets. If we don’t act boldly now, the markets will act for us very soon. Remember, Standard & Poor’s warned several weeks ago that it may downgrade its U.S. debt rating not over the debt limit fight – but because Washington has no plan to tackle its massive debt. The greatest threat to our economy, to job creation, and to our children’s future is doing nothing. Doing nothing is not an option. The American people won’t tolerate it, and neither will we.”
http://blogs.wsj.com/washwire/2011/05/12/boehner-strikes-back/
Well said, Speaker Boehner. Thank you for not standing down. Thank you for understanding basic economics; and thank you for realizing that we need to live within our means. Draw the bright line and make others choose which side they're on.
Bill Gross, the head guy here at PIMCO, wrote an article called 'The Caine Mutiny part II' talking about why he has a negative outlook on treasuries (Bonds from the US Gov) and has sold all of the ones we had.
http://www.pimco.com/EN/Insights/Pages/The-Caine-Mutiny-Part-2.aspx
