Advancing a Free Society

Raising debt ceiling not the real problem

Friday, February 25, 2011

Nobody wants to say it, but a major reason why corporations are not creating many jobs and expanding in the U.S. is due to increasing systemic risk being created by Washington. The U.S. is supposedly in economic recovery, yet President Obama projects a record $1.6 trillion deficit for 2011— with more annual deficits and escalating debt ahead. Government debt is growing three times faster than the $40 billion monthly increase in GDP.

What is going on?

The real issue is not the government's debt ceiling to accommodate ongoing deficit spending, but rather the wall that we are about to hit. This wall will be raised by foreign governments balking at investing in more U.S. debt except at significantly higher yields to offset the dollar's declining value.

Continue reading Scott Powell in The Detroit News