Stephen Covey, author of “The Seven Habits of Highly Effective People,” is comparing the science of geology and economics to predict the fallout of the nation’s government failure to get a hold on an effective debt management plan. While geologists can’t predict the when of a disaster with the San Andreas Fault and politicians can’t predict the when of another economic downturn for the United States, both are certain disastrous scenarios that are inevitable.
According to Covey, politicians have taken the US to the edge of a fiscal cliff with prolonging tax cuts and then initiating tax cuts that amount to less than $100 billion a year. Other pundits agree and feel that we’re on the road for another cliffhanger if the US government doesn't approve an increase in the limit of the US national debt. The real issue is that national debt has risen over $5 trillion over the past few years, and politicians are barely discussing ways to get debt management and the debt spiral under control. Debt management is in need of leaders and managers with courage and decisive thinking. Medicare, Bush tax cuts, debt owed by foreign governments, Fannie Mae debts and unfunded obligations like social security all need careful revamping. Even though the government is injecting $85 billion into the US economy, economists are predicting the following problems with the rapid increase of debt:
Even though the stimulus plans has helped less the unemployment rate and the housing market is showing signs of revival, debt management and poor fiscal policies still plague the United States.
According to Covey, politicians have taken the US to the edge of a fiscal cliff with prolonging tax cuts and then initiating tax cuts that amount to less than $100 billion a year. Other pundits agree and feel that we’re on the road for another cliffhanger if the US government doesn't approve an increase in the limit of the US national debt. The real issue is that national debt has risen over $5 trillion over the past few years, and politicians are barely discussing ways to get debt management and the debt spiral under control. Debt management is in need of leaders and managers with courage and decisive thinking. Medicare, Bush tax cuts, debt owed by foreign governments, Fannie Mae debts and unfunded obligations like social security all need careful revamping. Even though the government is injecting $85 billion into the US economy, economists are predicting the following problems with the rapid increase of debt:
- The US dollar will undergo quick devaluation against other major currencies, as occurred in 1984.
- Yield on US Treasuries could spike and even quadruple.
- International financial markets will lose confidence in US Treasuries and the US dollar.
- The cost of borrowing for the US government will increase dramatically. The US could find itself with the same problems that Greece faces today due to poor debt management and slow economic growth.
Even though the stimulus plans has helped less the unemployment rate and the housing market is showing signs of revival, debt management and poor fiscal policies still plague the United States.
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