James McKee

Republicans and Democrats Take 2011 Budget to the Edge



Posted: Monday, March 07, 2011

by James McKee
http://www.forex.tradingcharts.com

The mounting US deficit is drawing the ire of Republican constituents who insist that their representatives do something about a deficit that is fast approaching over 10% of the total US economy.  If the current budget is not revised quickly than the United States faces peril on either side of the fence.  If the Republicans are heeded than the budget cuts that will occur will have an adverse effect on US job growth and on the US economy at large.  The Democrats wish to continue driving up the bill for the US despite the fact that someday that bill must be paid.

Much like the debtor that promises to pay someday the United States is beginning to look very bad to its creditors (China to name one), and the day is soon coming that these countries will cash in their debt.  If China were to collect on all of the US Treasury bonds it currently holds the country would go bankrupt.  There is not enough money in circulation to cover all of the debt issued by the United States which begs the question, what is the US going to do?  The answer remains elusive even to the politicians themselves as they attempt to simply keep the “ship afloat.”

The USD will experience a new place at the table of the world’s economy as the next failed currency if the United States does not take getting out of debt seriously.  The Republicans are being reckless about the budget cuts according to Democrats however the buck has to stop somewhere.  If the USD is to trade as a major currency on the Forex exchange much longer then there need to be concessions on both sides of the aisle.  The United States cannot afford to continue to have such a horrible budget deficit, however it also cannot afford to allow its infrastructure to fall apart.
Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the forex exchange rates regularly.
This Article has been viewed 118 times. (Not updated in real-time.)
No comments yet.
We want your comments! If you can read this, you don't have javascript enabled, so you can't use this comment system. Please enable javascript.