U.S. federal budget
André Kühnlenz 08/03/2011
In the United States is under a huge debt. Nevertheless, the policy will probably start only in 2013 to reorganize the budget seriously.
investors worry that similar turmoil occur until then as now in the euro area.
The forecasts for the U.S. government are grim: In plain three times the economic output will increase its debt in 40 years when they face does not control soon, say the experts project budget of the Congress. But still can not predict when the ruling Democrats and the Republicans who control the House of Representatives, to take serious steps to put public finances some.
It grows from week to week, the risk that investors, such as the recent abrupt turn in Greece by the U.S. Government to grant no more credit, or only at exorbitant interest rates. A first taste of how fast turn market sentiment received, investors in the past four months by almost one percentage point shot the yield on ten-year government bonds up - even if interest rates with a good 3.5 percent is still historically low.
The consequences of the financial and economic crisis in the U.S. are alarming: while the economic output has risen by half since 2000, the Government debt increased by a half times. "The structural budget problems are not resolved, sooner or later face a crisis loan," warns Aneta Markowska, an economist at Société Générale in New York.
dispute over raising the debt ceiling
As a result, would exacerbate collapse in bond prices and thus higher interest rates, the financial difficulties, there was a threat of debt avalanche. Also, the entire financial system would suffer if the world's largest bond market plunges in turbulence. In the bond crisis in 1994, for instance, when the U.S. Federal Reserve, out of concern about inflation, raised interest rates several times and climbed the ten-year U.S. government bonds in the tip of over eight percent, Investors also fled from British and German government bonds. Increased volatility in the stock market, money market funds suffered losses.
argue Currently, U.S. politicians, especially on raising the debt ceiling. The law states that the Treasury does not borrow over 14,300 billion dollars. When this limit is soon broken, the government's debt but has not really screwed around 14,000 billion dollars: Good 4600 billion dollars of government bonds it holds in practice even as create health and social security fund savings in the papers. Apart from these national loan
Washington had outstanding bonds in late January more than 9500 billion dollars. They make 64 percent of gross domestic product (GDP). In the years before 2007 there were only 36 percent. Even more dramatic effect of the increase in international comparisons of industrial organization OECD countries, where it is one of the states to do so. Accordingly, the U.S. government was 2010 with 93 percent of GDP on par with countries such as Portugal. But while the Europeans are fighting with drastic austerity to the confidence of the markets are still in Washington all the cutbacks in the drawers.
Source: capital.de
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