Debt, Federal Debt | featured news

Days after one high-stakes standoff over finances was resolved, the two sides are getting ready for another as Congress prepares to address the nation’s borrowing limit.

German Finance Minister Wolfgang Schaeuble questioned on Tuesday how the United States could deal with its high levels of government debt after November's presidential election.

According to Rolling Stone contributing editor Matt Taibbi, Mitt Romney made his fortune exploiting two strategies that the Republican presidential candidate now decries: creating massive amounts of debt and milking federal government handouts... "The entire purpose of the business model that Romney helped pioneer is to move money into the archipelago from the places outside it, using massive amounts of taxpayer-subsidized debt to enrich a handful of billionaires. It's a vision of society that's crazy, vicious and almost unbelievably selfish, yet it's running for president, and it has a chance of winning."

The Republican Party has a Web ad spotlighting the fact that the debt has grown more under President Obama in less than one term than it did under President George W. Bush in two terms. Since taking office on Jan. 20, 2009, the debt under Obama has increased by $4.93 trillion, according to Treasury Department figures.

Projections suggest the debt will continue to grow faster than the economy, which would have to expand by at least 6% a year to keep pace.

Rival Democratic and Republican plans to raise the government's borrowing ability have thrust Congress into a standoff just one week away from a potentially devastating debt crisis.

In its mid-year long-term budget forecast, the Congressional Budget Office on Wednesday renewed its previous warnings that the government faces an increasing risk of a fiscal crisis due its ever-greater borrowing.

The United States probably wouldn't be able to maintain its prized AAA sovereign ratings status if it suffered even a "technical" default on its debt, Fitch Ratings said on Wednesday.

The Treasury has told lawmakers a roughly $2 trillion increase in the legal limit on U.S. federal debt was needed to ensure the government can keep borrowing through the 2012 presidential election, sources with knowledge of the discussions said.

The United States just passed a dubious milestone: Government debt surged to an all-time high, more than $14 trillion....