Fiscal Irresponsibility

Powerful Essays
President Obama said, "We are facing the worst economic crisis since the Great Depression." The jig is up, the news is out. The National Bureau of Economic Research announced what many economists have been saying for years, that we have been in an economic recession since December 2007. The housing bubble which burst in late 2006 has left thousands of Americans homeless and many banks failing or on the verge of failure. The resulting subprime mortgage crisis has led to one of the worst credit crunches in history. The DOW Jones Industrial Average which crashed in late October 2008 has lost nearly half its value, leaving many Americans without a means to retire. The causes, bad domestic securities and assets, have even spread abroad and have wrought financial havoc on a global scale. The financial sector is in a state of panic, its future is uncertain at best, and the banking industry is teetering on collapse. Now with all the ups and downs of the financial history globally and in the United States, the pervading fiscal, economic, and political failures wrapped around the United States’ debt could cause a complete economic austerity.

The nation's unnerving descent into debt began a decade ago with a choice, not a crisis. In January 2001, with the budget balanced and clear sailing ahead, the Congressional Budget Office forecast ever-larger annual surpluses for the foreseeable future. Voices of caution were swept aside in the rush to take advantage of the apparent bounty. Political leaders chose to cut taxes, jack up spending and, for the first time in U.S. history, wage two wars solely with borrowed funds. Now the national debt of $14 trillion is larger, as a percentage of the economy, than at any time in U.S. history except for the...

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...the world has survived the “Latin American debt crisis, the European monetary upheaval of 1992, [and] the Mexican bailout of 1994,” yet without some quick actions the world could witness another economical breakdown in the US (Garten).

Works Cited

Altman, Robert C., and Richard N. Haass. "AmericanProfligacy and American Power." Foreign

Affairs (2010). Web. 1 May 2011. .

Garten, Jeffrey. "Lessons for the Next Financial Crisis." Foreign Affairs 78.2 (1999): 76-

92. Jstor. Web. 1 May 2011. .

Shelton, Judy. "Currency Chaos: Where Do We Go From Here?" The Wall Street

Journal(2010). The Wall Street Journal. Web. 1 May 2011. .
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