Title: Movie Review and the Economy
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Description and explanation of the issue in the video, which stands out to be the most difficult in terms of solving in line with Federal Debt and Budget
In my opinion, Debt is the outmost issue that will be difficult to solve in America, according to the video “Ten Trillion and Counting.” President Barrack Obama says that his budget at that time was a reflection of the stark real thing of the things he inherited from the former president. The Debt was at one trillion, and this brings a costly recession and financial crisis. At the moment the video was on the air, the deficit was up to 11 million dollars making the U.S be in an unsustainable way. The debt issue will be difficult to handle to solve because the Presidents are blaming each other instead of coming up with a solution to end the debt issue in the country (Johnson, 2014). Even if a president inherits a land with debts, it is his or her responsibility to come up with solutions that will end the debt scenario. The government committed spending even more besides the country having some much debt. It is in depiction where president Barrack Obama says that he is ready to construct more bridges, rails, and roads. Debts can overrun a country’s economy, making it collapse economically.
An explanation of the most significant risk because of continued borrowing by America
The U.S continued to act to depend on the foreign loan is a crucial vulnerability in the shock event, like a collapse in the United States price of housing and utmost security on public beach. It may show the flow of the new funds in the U.S. being the national DebtDebt as per increase in capital, the likelihood of defaulting in government on its obligation increase the debt services. The department of the treasury will however have to raise the yield on new issues on the treasury security for them to attract the original investors (Research, 2014). It reduces the tax amount available to spend on the other government services since more tax revenue will have to get an interest in the national DebtDebt. However, this expenditure shift will make individuals have a low living standard, as borrowing for the projects on economic enhancement becomes difficult. As the rate that is on offer in treasury security will increase, corporate operation in the United States will be in place as a risk; also, an increase in the yield of new issue bonds becomes necessary (Ndumo, 2011). It, in turn, will need a corporation to raise the price of the services and products to meet the cost increase of its obligation on debt services.
References
Johnson, N. (2014). College costs, prices, and the Great Recession. Lumina issue papers.
Ndumo, P. (2011). From DebtDebt to Riches: Steps to financial success. Jacana Media.
Research, S. (2014). Stansberry research starter’s guide for new investors.