Сделай Сам Свою Работу на 5

Why does the US government need to borrow so much?





If you compare borrowing to the size of the US economy, it has been increasing since the 1980s.

But the 2007 financial crisis created huge gaps between government income and expenditure.

The economy was plunged into a deep recession and federal finances deteriorated dramatically as the government attempted to boost the economy and stabilise the financial sector.

As a result the debt ceiling was raised twice in the second half of 2008 and twice in 2009.

According to the Congressional Budget Office (CBO), US debt as a percentage of gross domestic product (GDP) is now 73%, twice as much as it was at the end of 2007.

 

Why can't the president raise the limit?

He doesn't have that power.

The limits are set by lawmakers in Congress.

They set in law how much the Treasury department can borrow.

 

Why has it become such a big issue?

Since the Democrats lost control of the House of Representatives to the Republicans in 2010, budget fighting between the two parties has become commonplace.

Republicans took their victory in the mid-term elections as a sign that Americans had rejected the president's Democratic agenda, and more specifically, that Americans were unhappy with the Patient Protection and Affordable Care Act, or "Obamacare" as Republicans label it.

Although past budget fights have included larger questions about the size and scope of the US government, this one is very specifically about Mr Obama's healthcare law.

Republicans have been doing everything in their power to force Mr Obama to delay implementation of a law they strongly believe was rejected by the American public.

Democrats argue the law was validated by the Supreme Court in June 2012 and was a central issue in the 2012 presidential election, which Mr Obama won decisively.

 

It seems a messy way to run the nation's finances.

Part of the problem is that Congress approves spending separately from the debt ceiling.

So politicians can agree to all sorts of expenditure without necessarily having the financing in place to pay for it.



In good years that does not matter too much as government income is greater that expenditure.

But historically those have been rare.

Usually the Treasury has to cover the gap between income and expenditure by borrowing on the international money markets.

 

When does the money run out?

The government has been juggling its debts to keep paying the bills, but those measures will run out between 22 October and the end of the month, according to the Congressional Budget Office.

 

What happens then?

The government could make drastic cuts in federal spending or try to raise taxes, or possibly even both.

That would be difficult and, perhaps, not enough.

 

So what does that mean?

The big worry is that the US government may have to stop paying back its debts, which is known as a default.

Traditionally the US has been able to borrow at low interest rates on the international markets, which has helped keep interest rates low for consumers.

But a default could damage confidence and drive up the cost of borrowing for Americans.

 

I. Vocabulary:

 

debt ceiling – потолок госдолга США

raise the debt ceiling – поднять потолок госдолга

set a cap – установить предел

lawmakers – законодатели

US Treasury - Министерство финансов США

use extraordinary measures – прибегать к чрезвычайным мерам

create huge gaps – создать огромную брешь

cover the gap – закрыть брешь

income and expenditure – доходы и расходы

plunge the economy into a deep recession – ввергнуть экономику в глубокую рецессию



deteriorate – ухудшаться

Congressional Budget Office – Бюджетное управление конгресса

enact measures –предпринимать меры

alter the limit on federal debt – изменить предел федерального долга

budget fighting – борьба вокруг бюджета

reject the president’s agenda – отвергнуть программу президента

Patient Protection and Affordable Care Act1

validate a law – придавать юридическую силу, признавать законным

approve spending – утверждать расходы

international money markets – международные денежные рынки

juggle – заниматься манипуляциями

borrow at low interest rates – занимать средства под низкие проценты

debt default – дефолт, неисполнение обязательств по долгам

damage confidence – подорвать доверие

drive up the cost of borrowing – повышать стоимость заимствований

 

II. Answer the following questions using as many vocabulary

items as possible:

1. What is the debt ceiling? Who sets it?

2. Why does the US government need to borrow so much?

3. Has the debt ceiling ever been raised?

4. Why has it become such a big issue?

5. What will happen if the government does not have the money to pay its debts?

 

III. Give a short talk on the problems with the US government debt ceiling. How much does politics interfere with the way the nation’s finances are run?

_____________________

1 see p.66

 

 

US GOVERNMENT SHUTDOWN

The US government has begun a partial shutdown after Republicans refused to approve a budget, saying they would only do so if funding for President Barack Obama's healthcare reforms was delayed.

The stand-off follows what has become close to an annual budget fight in Washington.

President Obama warned a shutdown would have "a very real economic impact on real people, right away", putting the fragile US economic recovery at risk.

 

Why was this allowed to happen?

It is a matter of political wrangling between the Republicans, who control the lower house – the House of Representatives – and the Democrats, who have a majority in the upper house, the Senate.

Due to disagreements between the two houses over federal government spending, the US Congress failed to pass a budget before the fiscal year ended on 30 September.

Since President Barack Obama's election the parties have never come to a resolution on a US budget that extends further than a few months.



The central issue this time round was Mr Obama's healthcare reform programme, with the Republican-controlled House of Representatives approving budgets eliminating its funding or delaying its central provisions. These were later rejected by the Senate.

As a midnight deadline passed, no budget bill had been agreed by both houses, meaning the US faces its first partial shutdown in 17 years.

 

How did it get so bad?

Since the Democrats ceded control of the House of Representatives to the Republicans in 2010, budget fighting between the two parties has become commonplace.

Republicans took their victory in the mid-term elections as a sign that Americans were revolting against Mr Obama's Democratic agenda, and specifically, that Americans were unhappy with the Patient Protection and Affordable Care Act.

Republicans vehemently rejected Mr Obama's efforts to overhaul completely the way healthcare is provided in the United States.

Republicans have been doing everything in their power to force Mr Obama to delay implementation of the bill.

Mr Obama and the Democrats, are keen to remind voters that the law was validated by the Supreme Court in June 2012 and was a central issue in the 2012 presidential election, which Mr Obama won decisively.

 

Who is affected?

Ten minutes before midnight on 30 September, the White House budget office issued orders for government offices to start shutting down, with workers told to stay at home without pay.

This affects all "non-essential staff", which by some estimates is more than 700,000 of the total 2.1 million-strong federal workforce.

National parks, museums, federal buildings and services will all be closed.

Air-traffic controllers, active military personnel, and border security guards are to be told to report for work, but new passports will not be issued and tax offices will also close.

Even some of the White House staff might have to stay at home.

However, workers like teachers, firefighters and doctors will continue to be paid, as they are paid for by the state, not the federal government.

 

 








Не нашли, что искали? Воспользуйтесь поиском по сайту:



©2015 - 2024 stydopedia.ru Все материалы защищены законодательством РФ.