The budget crisis of the United States during fiscal year 2011 is etching its image into history as we watch, strangely detached, hoping our elected leaders take the necessary steps to avoid the collapse of the worlds economic pillar. Will this be the end of the fiscal security of the United States and the green back? It could be if the Fed defaults on its debt. Or will this be remembered as a major triumph for the United States, as the beginning of new age of fiscal responsibility begins?
In May 2011 congress temporally extended the United State's debt limit, a fancy way to say "allowing the U.S. Treasury to borrow money to meet federal expenditures". Which is not unprecedented, since 1960 the Congress of the United States has voted 78 times to extend the debt limit.
The current national debt crisis issues lies on the backs of the President of the United States Barack Obama leading the Democratic Party and Eric Cantor the Republican Majority Leader in the House of Representatives. The President originally submitted the a proposal for the 2011 federal budget in February 2010; this budget proposal was quickly dismissed by both the democrats who wanted more spending, and the republicans who desired less.
The argument over budget cuts vs. tax increases has culminated in what "The Economist" proclaimed the deal of the century. The budget proposed by President Obama in July 2011 reduced Federal debt by a combination of cuts in expenditures and revenue increases by closing tax loop holes. The Republican Party demanded a 2.4 trillion in deficit reduction with 85% being budget cuts and 17% being revenue increases. The plan proposed in July nearly meets that obligation with 83% of the reduction being budget cuts and 17% being revenue increases. To put that in layman's terms the difference between the Republicans request and the most recent budget proposal is $50 Billion in budget reduction and $50 Million in increased tax revenues.
The battle over $50 Million or 2% of the reductions needed in the U.S. Budget is insane. Republican Party members of congress are now fighting the Democrats not for the good of the nation, they're fighting along goofy party lines. Had this budget been proposed by a Republican four months ago there is little doubt the GOP would have jumped on the deal like a fat kid on a cake. The Republican party is not just to blame. There are some in the Democratic party making asses of themselves by demanding less cuts. Both parties need to take this deal for the good of the nation and the world.
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