The credit crunch is hitting Washington, DC, as Uncle Sam maxes out his credit cards.
In addition to the enormously costly Obama budget, all the multi-trillion dollar bailouts, stimulus, and government expansion plans depend on one thing—the ability of the U.S. government to get money and spend it. Uncle Sam gets his money from one of three ways: taxes, borrowing, or just printing more currency.
Raising taxes during a recession is near-universally panned, except for the most die-hard liberals.
The ability to borrow is now in trouble, after Wednesday’s effort to auction $24-billion in new U.S. government bonds met with resistance. Those willing to loan the money (by buying the bonds) have started to demand higher interest rates as the government’s ability to repay becomes more questionable. Continue reading…
