Obama Addresses Debt Danger

Last night president Barack Obama gave a special address to the United States on the very real and very dangerous threat of defaulting on their debt that his country is looking at. In a rare prime-time address Obama warned American citizens of the dangers of defaulting and why the problem has not been addressed.

Unless action is taken, the United States will default on its debt one week from now. Congress has been working on raising the debt ceiling, a routine decision they have done numerous times since 1970, so that the US can borrow more money to pay off its bills.

This is where party politics has gotten in the way. Obama called out certain Republicans for “holding the economy hostage”. The debate currently resolves around two plans. One, the heavily favored bipartisan Obama backed plan would see unprecedented government spending cuts, as well as closing of tax loopholes to corporations and individuals making over $250 000 per year. The other would see larger spending cuts without the closing of tax loopholes.

The bill has not been passed though because a number of Republicans refuse to compromise on the closing of the tax loopholes.

Obama’s speech appealed to the average American. He constantly used the phrase “fair and balanced” when speaking of the bill he favored.

If America defaults on their debt next week, the shockwaves would be felt around the world. Interest rates would rise dramatically and the United States would lose its perfect credit rating. This would make getting funding for many people much harder. Both parties have agreed that avoiding defaulting is their number one priority.