DEBT MANAGEMENT » Get out of Debt

This week has been one of the most turbulent periods of time for our economy for quite some time. The U.S. is currently in danger of defaulting on its debt. If it does, the government would not be able to pay out benefits like Social Security and military pay, and the country would likely lose its AAA credit rating. Here’s what’s happened over the past 7 days:

U.S. Moves Closer to Debt Default

A debt plan introduced by House Speaker John Boehner was set for vote on Thursday night until it was postponed due to disagreements within the Republican camp. The delayed vote represents the ongoing struggles within Congress to come to an agreement on how to manage the breached debt limit and avoid an impending default.

Debt Ceiling Vote Potentially Moved to Friday

In a televised address to the nation on Monday night, President Barack Obama asked Americans to pressure their elected representatives to work out a compromise on the federal debt ceiling. As he’d done in the past weeks, the president made a point to emphasize the devastating effect failure to come to a comprehensive debt deal would have on the nation.

Congress Still at Stalemate Over Raising Federal Debt Ceiling

Source: Center for American Progress Action Fund

President Obama is scheduled to address the nation at 9 p.m. EDT (0100 GMT) regarding the nation’s debt crisis. According to officials familiar with the speech, the President will address the current debt talk stalemate, urge compromise between the two parties and emphasize the importance of “avoiding default and the best approach to cutting deficits.”

Cartoon by Steve Breen, Townhall.com, April 15, 2011

The U.S. economy has gone through its share of ups and downs in the past few years– many more downs than ups, of course. In the latest economic struggle, lawmakers are negotiating ways to avoid default after the national debt ceiling was reached in May.

Debt is the number one concern on the minds of everyone these days, both in the U.S. and abroad. In fact, national debt has been threatening to turn economies upside down–luckily, it seems like Greece has averted their own debt crisis. Now let’s see if our own country can do the same. If not, at least we can get books and music at a steep discount as the bankrupt national chain liquidates its stores.

EU Unveils Greek Debt Plan

As the debt debate continues in Congress, Moody’s makes the recommendation to eliminate the debt ceiling altogether. According to the credit rating agency, taking this step should be considered as a backup plan if lawmakers can’t come to any other agreement.

Chances of Compromise Deal Fading

Our country is so deep in debt that it threatens to turn our economy upside down. After hitting the U.S. debt ceiling of $14.3 trillion in May, the country now faces the very real danger of defaulting on that debt.

President Obama has warned that the debt ceiling needs to be raised by August 2 or default will be imminent, in which case government benefits like Social Security, military salaries and unemployment checks will likely not be paid next month. However, lawmakers can’t seem to agree on a budget package that would accompany raising the debt ceiling and continue to argue while the deadline draws near.

According to today’s L.A. Times, Obama was reported as stating, ”This process is confirming what the American people think is the worst about Washington: that everyone is more interested in posturing, political position and protecting their base than solving real problems.”

So if you were in charge, what would you do to solve this problem and prevent the U.S. from defaulting? You have until August 2 to vote:

President Barack Obama warned Americans on Tuesday that if Congress fails to avoid default, he cannot ensure government benefits, including Social Security checks, will be issued next month. He explained in an interview that if America defaults on its debts, benefit checks could be halted as soon as Aug. 3.

Government to Start Prioritizing Payments

Debt discussions are set to continue on Monday as lawmakers feel pressure from President Barack Obama to come to an agreement in the next 10 days. As of Sunday, Congressional leaders remained divided over the size and components of the plan, which will ultimately reduce long-term deficits.

Lawmakers Divided on Plan Components