ECONOMY

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

There has been a lot of talk about Qe2 lately, which might sound to you like an obscure molecular formula. In actuality, this term is related to the financial sector and how the government works to fix certain issues with the economy. If you, like many, are unfamiliar with this idea, find out how Qe2 works and what it means for you.

What Are Qe and Qe2?

Independence Day is rapidly approaching–a day when Americans celebrate freedom around the country. Unfortunately, lawmakers in Washington won’t be celebrating with the rest of us as they work through their July 4 recess in order to solve the national debt issue.

The United States has a long history of both good and bad money management. So to celebrate this Independence Day, let’s take a look at the history of U.S. debt, how we reached the debt ceiling and hopefully, how we can enjoy the holiday despite fears of default.

We never tend to think that something as fun-filled as 4th of July fireworks displays are ever tied to something as serious as the U.S. economy. But as this Independence Day approaches, many people in cities throughout the country will be stunned by silence and colorless skies as economic pressures in the U.S. impact their abilities to pay the expensive costs for fireworks.

China Ties to United States Fireworks (or Lack Thereof)

The Obama Administration is pushing congressional leaders to agree to a deal that will reduce the national deficit by July 22. The administration believes the government’s borrowing limit must be raised by this date to avoid default in early August, according to a Wall Street Journal report.

Government Only Needs Two Weeks to Pass Legislation

A new report from S&P/Case Shiller reveals the downward trend in home prices finally broke in April. After eight consecutive months of decline, home prices in the 20-city index actually rose 0.7 percent in April compared with March.

Too Early to Tell if Price Increase Is Permanent

The increase in prices is welcome to many home industry leaders who have been waiting for a change in the downward trend. However, because the market has been struggling for so long, it’s possible the increase is only temporary.

Prices at the pump are expected to drop as low as $3.40 a gallon by July 4 weekend, according to new projections. These projections come after the International Energy Association (IEA) announced plans to sell oil from emergency reserves to cut costs.

IEA Plans to Sell 60 Barrels of Oil

The IEA announced on Thursday that it, along with the U.S. Strategic Petroleum Reserve (SPR), plan to sell a combined 60 million barrels of oil from emergency reserves–and possibly more later.