Christian Debt Recovery

Federal Debt Limit Debt Ceiling

July 30th, 2011 |

Author: Gavin

federal debt limit debt ceiling

Business Strategies for a Potential Debt Ceiling American Default

How exactly does this “debt ceiling” that we are hearing about affect the day to day operations of businesses in the United States? When the government can no longer borrow, does that mean your good credit rating is going to be useless to you? It seems a bit far-fetched, but that’s exactly what will happen. Any type of government subsidies or loans you’re relying on to do business now will be frozen because the fed won’t be able to take on any more debt. It might not happen overnight, but if the debt ceiling isn’t raised and the government defaults on its payments, you will pay the price for it.

This is not a gloom and doom prediction; it’s simply a statement of fact. If your business is solvent and you’re handling your operating costs with your own money, the debt ceiling and defaults of the US government won’t affect you – at least not right away. The long term picture will be a little bleaker. Those who you do business with that are not fortunate enough to be on firm financial footing will be unable to cover their overhead, and loans will not be available, so your numbers will go down. You can cut your own overhead to compensate, but that could mean job losses, another strain on the system.

As a private business owner, you have options where it comes to cutbacks and personnel strategies. If you do have to do lay-offs, you can use job applicant tracking software to database those who leave as the first to come back. You can also use recruitment tracking software to keep track of any promising new candidates. There will be plenty of them, because everyone else will be in the same position you are. Keep a positive outlook and have faith that things will get better. When they do, make sure you hire all that great industry talent before everyone else gets to them.

The odds of the government hitting the debt ceiling and Congress not approving a raise of that ceiling are pretty long. It’s unlikely to happen, but the situation is still dire for the country and particularly small businesses that are relying on lines of credit and federal subsidies to survive. If the country needs to cut back on expenses, likely casualties will be Medicare and Medicaid, the subsidies given to oil and gas companies, and incentive programs for new businesses and alternative energy. These are all critical to each of us, so some serious planning needs to be done to prepare for those eventualities.

Look for ways to eliminate credit purchases and pay cash as often as possible for inventory and office supplies. If you can manage to get away from financing completely, you’ll be in much better shape if things do go bad. The debt ceiling debate is only the beginning. If the government doesn’t cut spending, this discussion will happen again, and the solution won’t be as simple as raising the borrowing limit.

About the Author

I write content on a variety of topics including internet marketing, San Francisco SEO, PPC campaigns, recruiting software, applicant tracking, plagiarism detection, junk hauling services, vacation deals and franchise marketing.

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