Friday, October 18, 2013

Republicans in turmoil as Congress passes bill to end debt crisis

1. Republicans in turmoil as Congress passes bill to end debt crisis. (2013 October 16) The Guardian.

2. Category of problem: Budget crisis, health care, government shutdown

3. Level of problem: National level

4. The article concerns: A bill passed to raise the debt ceiling through January 2014, increase federal worker salaries by 1%, provide back pay for uncompensated federal workers, continue with the implementation of the Affordable Care Act and conclude the government shutdown. Additionally, polls show that the shutdown has resulted a declining public opinion of the Republican Party.

5. Why this is important: The effects of this are as follows: (1) Congress will be able to continue borrowing money and the government will not have to rely solely on interim income and treasury reserves, (2) federal workers will return to work, be compensated for the pay furloughs they have experienced and receive slight salary increases, (3) the Affordable Care Act will go into effect, significantly shifting the conduct of the health insurance industry, and (4) members of the Republican party may not be able to secure as many votes in upcoming elections.

6. My views on this issue/policy: I don't have an incredible grasp on the concept of the debt ceiling, even after reading about it, because various sources describe it differently. From what I understand, it's a safety measure and/or guideline set in place to encourage the government to limit their borrowing of funds, so as not to further increase debt.

Under that premise, raising the debt ceiling was an unfortunate measure, in the sense that it underlines what could be considered a pretty catastrophic amount of debt. However, it seemed like an utterly necessary measure considering that if the debt ceiling was reached, we would have to rely merely on income from taxing and treasury reserves to fund government payouts; money which would have been drained within less than a month, according to the majority of sources I read. The more important lesson from this seems to be that we need to raise taxes to raise funds that support our spending and perhaps even pay off existing debts. The government can either raise taxes or cut spending, but I'm personally in favor of government intervention for the many individuals to whom the free market economy is detrimental.

Similarly, I am in favor of the two remaining segments of the bill (increased salaries and pay backs for federal workers and the Affordable Care Act), as they are in line with my fiscal liberalism as described of. Further, I'm pleased with declining public opinion of the Republican party, because it decreases the likelihood of conservative legislation in the future.

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