Thursday, 14 February 2013

Fiscal Cliff – A Bitter Medicine

“the one thing that I think, hopefully, in the new year, we will focus on is seeing if we can put a package like this together with a little bit less drama, a little less brinksmanship, not scare the heck out of folks quite as much.” 
                                                                                               - Barack Hussein Obama II
This was a statement of 44th President of the USA on the New Year day of 2013. The statement was about the most awaited “Fiscal Cliff Deal”.
US Treasury borrowed trillions of dollars over the decade from the foreign investors to finance two long wars and promote economic growth by fiscal stimulus. The Federal reached the current debt limit of $16.39 trillion USD. Since the Federal government has reached the borrowing capacity, the US Treasury is taking extraordinary measures to raise money. The Bipartisan Policy centre forecasts that the debt ceiling would have to be raised between $ 0.73 trillion USD and $ 1.25 Trillion USD to extend the government’s borrowing capacity through 2013.