Showing posts with label US default. Show all posts
Showing posts with label US default. Show all posts

Tuesday, 20 December 2016

How likely is a bankruptcy of America? (Part 2)

Inside America there are political forces who are concerned about the growth of public debt not less than external lenders. The Republicans in the Parliament actively impeded increase government debt ceiling in 2013. In result the annual budget for the next year was not accepted, there wasn't enough money to pay for the work of government departments, after which the government virtually stopped its work for 16 days. Situation was close to default, and just one day before its announcement Republicans surrendered their positions, the ceiling of external loans was removed and other than that it's been declared a moratorium on the upper limit of public debt until March 2017. It may be noted that since 2013 the rate of growth of public debt have increased, and as already mentioned, new records were set.
On what this money is spent? The biggest part of expenditure in the budget - it is a social and health insurance. These costs exceed those large objects such as security and defense all together. They consume a large part of the tax, but, despite this, the money is still not enough, and the government has to borrow more. In fact, the quality of social security and health insurance are far from ideal, and yet the funding of their budjets suffer gradual depletion. Judging by this picture, we can say that the money simply dissolve.


Monday, 19 December 2016

How likely is a bankruptcy of America? (Part 1)

On September 30, US 2016 fiscal year was completed. It was one of the brightest in the history of world's largest economy. Unfortunately, the most spectacular is the huge increase in the national debt, by $1.4 trillion dollars, the total amount of which it is now 19,573 trln. dollars. The very figure seems daunting, but even more excitement is that the pace at which it grows.
As the pace of growth this is the third year after 2009 and 2010, which hit the midst of the subprime mortgage crisis. There was also another record of US debt growth, in August it grew by 151.5 billion dollars, which was the highest monthly increase in the country's history. On the debt growth rate says more the fact that for less than the last ten years, America has increased its national debt by nearly $10 trillion, and it is equivalent to the amount taken by the previous two hundred years of existence of the country. Most investors around the world are concerned about this situation, as in the case of default on the obligations of the United States in the world can happen serious financial disasters.