Can The Federal Government File Bankruptcy?

26 Jan Can The Federal Government File Bankruptcy?

How good is the Federal Government’s credit rating?  This is a question of great concern right now because President Obama and his incoming administration have indicated that they are open to the possibility of another stimulus package.  In other words, they are looking to borrow another $800 plus billion dollars to help stimulate the economy.  Additionally, we will be running huge budget deficits each year for the next couple of years just to pay for what we have committed ourselves to in the past.  In other words, we have committed more money than we take in.  My questions are:

1.  How Good is the Federal Government’s Credit?  2.  How much can we keep borrowing until we are cut off?  3.  If we exceed a certain amount, are our interest rates going to go up?  4.  If so, will our creditors shut off our credit lines?  5.  When all is said and done, how are we ever going to pay all of this money back to our creditors? 6.  What do we have to offer our creditors if we default?  If you don’t think that our creditors are pondering these questions right now, I think you are living in denial.  Our creditors have a plan.  I just hope our leaders have another plan.If we keep spending money like there is no tomorrow, will there really be a tomorrow?  I am genuinely concerned about the future.  I am also genuinely concerned about another trillion dollars going down the drain.  Not to take away anything from President Obama, he inherited a mess, probably the biggest mess that any United States President ever inherited.  The question is:  What is his plan to fix this mess?  So far, I have not seen a comprehensive plan to deal with the economy.  Again, President Obama ran on a platform of change, but so far, all I have seen is more of the same.  This administration is hiding the ball, yet calls each and every day for more and more transparency.  This is why I am concerned about the present administration.  I have never seen anyone or thing spend their way into prosperity.

More importantly, I am concerned about the fiscal health of the United States.  I am concerned about fiscal policy and what we actually owe.  As much as it may hurt, I really want to know.  I think we deserve to know. Sometimes the truth hurts, but in this case, knowing is the first step in correcting the problem.  I have heard some accounts that we owe as much as 65 trillion dollars.  Other accounts set the number at 15 trillion dollars, and still others put it at 12 trillion dollars.  All of those numbers are in the stratosphere.  There are only 305 million Americans.  I could do the numbers but I don’t want to get sick to my stomach.

The last question I pose is:  Can the United States File For Bankruptcy?  What if we agreed to pay off our debts without interest or penalties?  At least that would give us an opportunity to leave our children a world with no new debt; however, I don’t think there is any way that we are going to leave them a debt free United States.

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Carmen Dellutri is a proud member of the Florida Bar, and he is a Board Certified Consumer Bankruptcy Attorney, Certified by the American Board of Certification. He practices in the areas of Consumer Bankruptcy and Plaintiff's Personal Injury. He is the principal attorney at The Dellutri Law Group, P.A. The firm supports many charitable and civic causes by donating time and much needed capital to our community. Mr. Dellutri and the other attorneys in the firm routinely speak to students of all ages about various legal and societal issues.
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