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→History of the "Debt Limit"
The Obama deficits are currently more than half the size of total private savings. Even before President Obama's massive increase in deficits, the national savings rate was insufficient to finance job creation (or "domestic private investment"). To sustain large deficits, the economy would require a combination of more private saving (less consumption), lower investment (less job creation), and higher borrowing from abroad. The unsustainability of deficits tends to be triggered rapidly, as no investor wants to be the one still holding the government debt when eventual default or hyperinflation occurs.
The Obama deficits are currently more than half the size of total private savings. Even before President Obama's massive increase in deficits, the national savings rate was insufficient to finance job creation (or "domestic private investment"). To sustain large deficits, the economy would require a combination of more private saving (less consumption), lower investment (less job creation), and higher borrowing from abroad. The unsustainability of deficits tends to be triggered rapidly, as no investor wants to be the one still holding the government debt when eventual default or hyperinflation occurs.
== History of the "Debt Limit" ==
== History of the Debt Limit ==
The Second Liberty Bond Act of 1917, which helped finance the United States’ entry into [[World War I]], allowed the U.S. Treasury to issue long-term Liberty Bonds marketed to the public to hold down the federal government's borrowing costs. The 1919 Victory Liberty Bond Act raised the maximum allowable federal debt to $43 billion, although the total outstanding federal debt at the time was only $25.5 billion.
The Second Liberty Bond Act of 1917, which helped finance the United States’ entry into [[World War I]], allowed the U.S. Treasury to issue long-term Liberty Bonds marketed to the public to hold down the federal government's borrowing costs. The 1919 Victory Liberty Bond Act raised the maximum allowable federal debt to $43 billion, although the total outstanding federal debt at the time was only $25.5 billion.