US debt situation- The latest overview
- U.S. debt situation – The latest overview
By: Grace Ruskin- Financial Advisor/ Contributing Writer (donny-wise.com) Contact Grace Ruskin via donny-wise.com
Like us, the government also has a checkbook where it spends more money than it brings in. the federal budget deficit is the difference between how much the government is spending and how much revenue it is earning. The amount of debt has been increasing and the government had hit the debt ceiling in May 2011. A bitter political argument ensued between the Republicans and the Democrats and ultimately the debt ceiling was raised along with incorporating a number of other measures. Thus debt management became a necessary activity on the part of the U. S. government. The spending by government and the increasing amount of federal debt is one of the major issues in the Presidential election at the end of 2012. The Republicans have charged the Democrats of spending too much without paying enough for it.
In the Senate, majority of the Republicans have opposed an extension of unemployment benefit packages since they were concerned that this would add to the growing deficits. Democrats have countered by saying that the Republicans have failed to pay for extensions of tax cut that they have favored. In the first week of February Treasuries fell as a report showed the weekly jobless claims that matched a four-year low. The Chairman of the Federal Reserve Ben S. Bernanke had failed for the second day to indicate that the central bank will boost economic stimulus.The yield on the 10-year note which is the benchmark rose to the highest level in a week after Treasuries were beaten by corporate bonds in February as the U.S. economy was showing signs of improving. Bernanke had repeated a testimony in the Senate that he had previously delivered in the house that the Economy had shown signs of improving and there had been positive developments in the jobs market. The cost of borrowing from Spain and France had reduced.
According to Charles Comiskey, the head of Treasury trading at the Bank of Nova Scotia (BNS) in New York said that the jobs market has been improving slightly. The Bank of Nova Scotia is one of the 21 firms which trade Treasuries with the Fed. Comiskey said that yields backed up to some extent generated by the fact that Bernanke hadn’t said enough to satisfy some people who were expecting more concrete assurance. However there has been rise of to year bond yield and 30 year bond yield by a considerable point.
- Treasurys slip after business activity picks up (sfgate.com)
- Bernanke Pulls Treasurys Both Ways, Stocks Flat (blogs.wsj.com)
- Ben Bernanke Warns Congress in Its Own Language (swampland.time.com)
- Bernanke Pessimism Drives Credit With Forced Government Cutbacks (businessweek.com)
- Bernanke Warns Senators to Alter Fiscal Path (usnews.com)