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United States Financial Reorganization Proposal Will Fail
- By Orietta Qi
- Published February 8, 2012
- Business Management
- Unrated
Orietta Qi
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Cut expenditure and debt relief are not conducive to economic recovery; not reduce the debt, the debt crisis is approaching. Obama administration and Congress into a dilemma.
Obama created by the Financial Reform Commission published the depth of the financial reorganization proposals, but without the specified number of votes, the proposal submitted to Congress did not that day, the outside world predicted that Obama is expected to be the occasion of the Provisional State of the Union of spring forth in the financial consolidation ideas. The wording and display Traditional and Simplified Management in 2011 will reflect Obama's start with the severity of the federal debt.
Abortion financial reorganization proposal
3 December, the Financial Reform Commission, the United States by 11 votes to 7, through a deep financial reform program.
Program proposals to the federal government revenue and expenditure system major surgery to reduce the national defense, social welfare spending, postpone the retirement age of employees, employees of the federal government to freeze the pay plan and the next three years to expand the tax base to reduce the deficit.
If the program was implemented, the U.S. federal government will reduce in the next 10 years, 4 trillion debt, the deficit in 2015 accounted for GDP8.9% from the current dropped to 2.3%. Internationally recognized safety level of the deficit not higher than 3% of national GDP.
However, this program within the Commission did not get enough votes to Congress, which greatly weakened the program was transformed into the possibility of legislation.
Finance Reform Commission established by the president earlier this year for the design of financial consolidation program executable. It belongs to the White House peripheral bodies, made up of 18 politicians from both parties, entrepreneurs and academics, including a non-party personages.
Committee established pursuant to presidential decree, the proposal must be approved by the Committee to be submitted within 14 votes in favor of Congress. But because various interest groups strongly defend their own interests, the proposal failed to gain enough votes to Congress, and ultimately reduced to an ordinary document Obama's desk.
Debt before the crisis comparable to the Irish
Total federal debt doubled in the past 7 years, to 140 billion U.S. dollars. And there is further deterioration, the U.S. debt clock site shows the U.S. public debt is $ 10,000 per second rate. These expenses are all dependent on debt payments. This year, the U.S. federal debt held by the public accounts for 62% of the national GDP, it was predicted that if the basis of this development in 2035, this figure will reach 185%.
If this data and Greece, Ireland, the process of comparing the debt crisis situation will see from the debt crisis in the United States has been very close. Bond market debt-GDP ratio in Greece to 127% of abandoned Greece, the Irish government was forced to seek help before the European Central Bank and the IMF, its GDP, the proportion of federal government debt was 64%.
Despite
the outbreak of European countries sovereign debt crisis after another eye-catching, but the biggest debt "bomb" was buried in the Atlantic west coast of the United States hidden.
The OECD released a report last month that the U.S. needed to stabilize the financial consolidation of debt higher than the intensity of all Western European countries, members of the organization can be said that the debt situation in one of the worst.
Reported that the United States needs to reduce the current account GDP8.5% on the basis of sovereign debt in 2025 will be back to a reasonable level of debt, while in the United Kingdom, Portugal and Ireland, the figure is 5% -7%.
America's most authoritative federal budget, the Congressional Budget Office this summer, regulatory agencies have sounded the alarm: "escalating federal debt will increase the risk of onset of the debt crisis," the office also pointed out that if further cuts until the debt crisis, only more painful.
No country is more worthy than the U.S. debt situation of the Chinese people care about. The stability of a country's debt is closely related to their currencies, while China's foreign exchange reserves of about 65% of resources invested in U.S. dollars, 90% of the import and export trade through the dollar transactions.
Unfortunately, the United States has not come up with sophisticated programs to reduce the deficit and debt.
Although the debt situation is urgent, the U.S. dilemma.
The fundamental way to reduce the debt the government is to increase revenue and reduce expenditure in the U.S. economic recovery is still fragile situation, carry out the financial reorganization will undoubtedly increase the downside risks to the economy, shaped like quenching thirst with poison.
As a result, financial consolidation around the United States Government to simplify the debate for the Government to be income or employment. If the government cut expenditure, it will hurt the economic vitality, if the Government wants to protect jobs, it will further push up debt.
The date of release of contradictions exposed in the program, because the U.S. Labor Department released the same day the national unemployment rate in November, and this data set a new high since April of this year.
The U.S. government faced a fiscal reform brewing real challenge is how to dispose of the Bush administration tax breaks to leave the income tax. The tax benefits for the whole people expires at the end of 2010. Congress must vote on whether to extend before the expiration of the concession. The Democratic Party advocates an end to the rich benefits, only less than 25 million U.S. dollars to the income of families below the extension of tax incentives, Republicans claim to the universal extension of the concession.
Both sides claim to own more conducive to economic recovery and to demonstrate their point of view. Democratic Party thinks that the rich do not need these privileges, even enjoy, it will not for consumption, only the bank. Republicans believe that the rich are the main consumer, is most likely to spend the money people.
Obama did vote on the plan a cautious enthusiasm. Select the day he was writing the announcement of the financial reorganization plan welcomed and promised he would seriously consider some of the recommendations adopted. But he did not say which part will be considered.
Obama created by the Financial Reform Commission published the depth of the financial reorganization proposals, but without the specified number of votes, the proposal submitted to Congress did not that day, the outside world predicted that Obama is expected to be the occasion of the Provisional State of the Union of spring forth in the financial consolidation ideas. The wording and display Traditional and Simplified Management in 2011 will reflect Obama's start with the severity of the federal debt.
Abortion financial reorganization proposal
3 December, the Financial Reform Commission, the United States by 11 votes to 7, through a deep financial reform program.
Program proposals to the federal government revenue and expenditure system major surgery to reduce the national defense, social welfare spending, postpone the retirement age of employees, employees of the federal government to freeze the pay plan and the next three years to expand the tax base to reduce the deficit.
If the program was implemented, the U.S. federal government will reduce in the next 10 years, 4 trillion debt, the deficit in 2015 accounted for GDP8.9% from the current dropped to 2.3%. Internationally recognized safety level of the deficit not higher than 3% of national GDP.
However, this program within the Commission did not get enough votes to Congress, which greatly weakened the program was transformed into the possibility of legislation.
Finance Reform Commission established by the president earlier this year for the design of financial consolidation program executable. It belongs to the White House peripheral bodies, made up of 18 politicians from both parties, entrepreneurs and academics, including a non-party personages.
Committee established pursuant to presidential decree, the proposal must be approved by the Committee to be submitted within 14 votes in favor of Congress. But because various interest groups strongly defend their own interests, the proposal failed to gain enough votes to Congress, and ultimately reduced to an ordinary document Obama's desk.
Debt before the crisis comparable to the Irish
Total federal debt doubled in the past 7 years, to 140 billion U.S. dollars. And there is further deterioration, the U.S. debt clock site shows the U.S. public debt is $ 10,000 per second rate. These expenses are all dependent on debt payments. This year, the U.S. federal debt held by the public accounts for 62% of the national GDP, it was predicted that if the basis of this development in 2035, this figure will reach 185%.
If this data and Greece, Ireland, the process of comparing the debt crisis situation will see from the debt crisis in the United States has been very close. Bond market debt-GDP ratio in Greece to 127% of abandoned Greece, the Irish government was forced to seek help before the European Central Bank and the IMF, its GDP, the proportion of federal government debt was 64%.
Despite
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The OECD released a report last month that the U.S. needed to stabilize the financial consolidation of debt higher than the intensity of all Western European countries, members of the organization can be said that the debt situation in one of the worst.
Reported that the United States needs to reduce the current account GDP8.5% on the basis of sovereign debt in 2025 will be back to a reasonable level of debt, while in the United Kingdom, Portugal and Ireland, the figure is 5% -7%.
America's most authoritative federal budget, the Congressional Budget Office this summer, regulatory agencies have sounded the alarm: "escalating federal debt will increase the risk of onset of the debt crisis," the office also pointed out that if further cuts until the debt crisis, only more painful.
No country is more worthy than the U.S. debt situation of the Chinese people care about. The stability of a country's debt is closely related to their currencies, while China's foreign exchange reserves of about 65% of resources invested in U.S. dollars, 90% of the import and export trade through the dollar transactions.
Unfortunately, the United States has not come up with sophisticated programs to reduce the deficit and debt.
Although the debt situation is urgent, the U.S. dilemma.
The fundamental way to reduce the debt the government is to increase revenue and reduce expenditure in the U.S. economic recovery is still fragile situation, carry out the financial reorganization will undoubtedly increase the downside risks to the economy, shaped like quenching thirst with poison.
As a result, financial consolidation around the United States Government to simplify the debate for the Government to be income or employment. If the government cut expenditure, it will hurt the economic vitality, if the Government wants to protect jobs, it will further push up debt.
The date of release of contradictions exposed in the program, because the U.S. Labor Department released the same day the national unemployment rate in November, and this data set a new high since April of this year.
The U.S. government faced a fiscal reform brewing real challenge is how to dispose of the Bush administration tax breaks to leave the income tax. The tax benefits for the whole people expires at the end of 2010. Congress must vote on whether to extend before the expiration of the concession. The Democratic Party advocates an end to the rich benefits, only less than 25 million U.S. dollars to the income of families below the extension of tax incentives, Republicans claim to the universal extension of the concession.
Both sides claim to own more conducive to economic recovery and to demonstrate their point of view. Democratic Party thinks that the rich do not need these privileges, even enjoy, it will not for consumption, only the bank. Republicans believe that the rich are the main consumer, is most likely to spend the money people.
Obama did vote on the plan a cautious enthusiasm. Select the day he was writing the announcement of the financial reorganization plan welcomed and promised he would seriously consider some of the recommendations adopted. But he did not say which part will be considered.