Ending a perilous stalemate, President Barack Obama and congressional leaders announced a historic agreement Sunday night on emergency legislation to avert the nation's first-ever financial default.
How many watched the news only to see the Republicans and Democrats not coming together on this debt issue that will do more harm to the United States. This has not been about the finances it’s been about power.
Ending a perilous stalemate, President Barack Obama and congressional leaders announced a historic agreement Sunday night on emergency legislation to avert the nation's first-ever financial default.
The dramatic resolution lifted a cloud that had threatened the still-fragile economic recovery at home and it instantly powered a rise in financial markets overseas. The agreement would slice at least $2.2 trillion from federal spending over a decade, a steep price for many Democrats, too little for many Republicans.
In case you are not aware the Debt Ceiling is the legal limit on borrowing by the federal government. Before 1917, Congress had to approve borrowing each time it came up. In order to allow for more flexibility as the nation entered World War I, lawmakers agreed to give the federal government blanket approval for most types of borrowing as long as the total was less than an established limit.
If you were like me, you were glad to hear they had reached some type of agreement. Congress will start voting on a last-minute debt ceiling deal that would keep the country out of default and reduce deficits by an estimated $2.5 trillion over a decade. Whether the deal might also avert a first-ever credit downgrade for the United States is not clear, since ratings agency Standard & Poor's indicated it was looking for a credible, bipartisan plan that had at least $4 trillion of debt reduction.
As described by the parties Sunday night, the plan includes no tax or entitlement reform measures up front, although theoretically it leaves the door open to both. The current wide divisions between the House of Representatives and the Obama administration over the debt limit creates a high level of uncertainty and causes us to raise our assessment of event risk. We would reduce our assessment of event risk if the government changed its framework for managing government debt to lessen or eliminate that uncertainty.
I use to joke how the only way your government bonds would become worthless is if the government defaults…and the government doesn’t default, it just prints more money. This has always been good for a laugh. Yet the situation in Washington is becoming increasingly crazy as talk of a government default became very real.
I’m an optimist. For a situation like the debt ceiling, all parties involved have incentives to resolve the situation. When everyone agrees that something must be done, it almost always gets done.
Yes, it’s possible the government could default, or the stock market could tank overnight…but it’s more likely that very little will happen in the short term. So would you rather focus on the 0.05 percent chance…or the 99 percent chance?
Note that I said “focus,” not prepare for. You always want to diversify your investments so that if the worst happens, you’re prepared. Which makes you wonder are you prepared for your rainy day?
How many times did I hear my parents say, make sure you save for a rainy day! I just didn’t know that most of my days were going to have thunder and lightning and be rainy.
With the country hours away from running out of money to pay its bills, the Senate approved a bipartisan bill that will raise the United States' borrowing authority. The bill will now be sent to President Obama who is expected to sign it into law.
The US Senate approved a sweeping package that will cut trillions from the deficit and raise the debt limit just hours before the government faced a default on its obligations. The bill passed the senate, 74-to-26.
The president emphasized that this was "only a first step," and then went on to echo what Sen. Harry Reid said on the floor of the Senate, saying that during the negotiations of the super committee, the lawmakers had to "work together" toward a "balanced approach where everything is on the table."
He said that means Medicare and Medicaid reform but also a reform of the tax code to get rid of loop holes and so the "wealthiest Americans pay their fair share."
"Everyone is going to have to chip in," Obama said. "It's only fair."
People are generally pretty good at saving for specific items or experiences. Say, for example, you want to save enough money for a down-payment on a house. You put certain strategies into action, cut back on certain other expenses and slowly build your way up to that figure you had been aiming for.
Sure, it takes time and effort and a few missed dinners at fancy restaurants, but the tangible reward at the end, coupled with the defined amount of money you’re shooting for, make the process one that most people can manage sooner or later. Saving for unspecified events or that looming ‘rainy day’ we all fear, is another thing entirely. While people know they should save for a rainy day, they’re generally far more preoccupied with splashing out and having fun in the sun, so to speak.
While it’s not fun to think about, the feeling of security that comes from knowing you have funds in reserve for unplanned events like house or car repairs, illness or that terrifying moment when your computer hard drive gives up the ghost is something that we all should aim for. Your accountant or financial advisor can help you find more individually-catered saving solutions, but here are three tips to get you started and help you get that rainy day fund up, up and away!
We all experience windfalls every now and again–a bigger tax return than usual, a government grant we weren’t expecting, perhaps a Christmas bonus at work. Instead of spending it on something just because it’s extra money, put it into your rainy day savings. It’s technically cream on top of your usual income, so if you save it straight away you’ll hardly notice that it’s gone.
