With a “compromise” on the debt standoff possibly happening early this week, it is useful to look back to see how we got here in the first place. The current debt crisis did not happen overnight; its roots can be traced back to when the housing market bubble burst back in 2007. The reckless lending practices of the government sponsored enterprises known as Freddie Mac and Fannie Mae unleashed turmoil on the markets in 2008, which led to TARP and massive borrowing by the federal government. This, in part, paved the way for the election of the most liberal president ever – the worst possible outcome for a country drowning in debt.
When the Obama Administration took the reins of power in Washington in early 2009, spending predictably increased to unprecedented levels. All told, the failed stimulus cost American taxpayers $278,000 per job created. With 9.2 percent unemployment, the stimulus only raised the debt and did not produce the jobs that were promised.
With all of its spending, the Obama Administration has added $4 trillion to the national debt and pushed us once again to the brink of the debt ceiling. The reason America has a debt ceiling in the first place is to keep spending in check. Having been raised 98 times since 1940, obviously the debt ceiling is more like a glass roof that continues to get shattered because of the federal government’s profligate spending habits.
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