By Federal law, Congress has to authorize borrowing any money for the government that might be needed in order to pay for programs or laws that Congress passes. The debt limit or ceiling has been bumped up a few times because of this, making the ceiling much higher. This was one of the least popular things that the Congress wanted to be a part of. The question has been raised a thousand times, but the debt ceiling was a battleground and something had to be done.
They continued to push the debt ceiling away, and then the country had to default on their debt. This left America stunned and rather scared at the same time. This has not happened, and now there is no plan to get the country out of debt. They want to try a second run of deficit reduction, and get as much as they can out of it in order to get out of the debt. America’s credit is falling, and this means other countries are less likely to loan money out since America does not have anything to back their finances up with.
Cuts have been made in military spending, Medicaid and Medicare, education, and transportation. They want to save as much money as possible when it comes to the country. This only cuts spending without raising revenues. This could be a problem if they are trying to get out of debt. Cutting this type of spending could initially slow down any type of recovery that America once had. There is not going to be another debate about the debt limit and the recession until 2013, what do you think the country is going to do until then?