A State of the Union Roundup
In his State of the Union address Tuesday night, President Obama began by addressing the aspect of rising corporate profits and his goal of a "rising, thriving middle class" -- and then he then focused much of his time on the federal budget. Why such a big emphasis on the budget in his speech, and so early in the speech? Well, the nonpartisan Congressional Budget Office projects that, if current laws remain in effect, by 2023 debt will likely comprise 77% of gross domestic product -- leading to dwindling national savings, a lack of financial flexibility for lawmakers and a heightened risk of fiscal crisis. Should the last item transpire, says the CBO, it would impair confidence to such an extent that "the government would be unable to borrow at affordable rates."
As Obama recognizes, every dollar the government borrows to fund the deficit is money a company can't use to expand its business, or a mortgage that a would-be homeowner can't get. He cited the need for a "balanced" approach to cutting the deficit, but said we need to "work to pass a budget that replaces reckless cuts with smart savings and investing in our future." While he noted that we "must keep promises we've already made" with regard to entitlements, he also acknowledged that "modest" entitlement reforms would be necessary in such programs as Medicare -- which will face rising medical costs associated with an aging population....561 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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