Debt Crisis

Paper Summary:

This paper focuses on the general topic of the United States of America's national debt crisis. The first part of the paper provides insights into the causes and affects of the debt and identifies some large and small companies that are most affected. The second part of the paper discusses the risks and valuations of companies and instruments, as well as risk and valuation methodologies that have been developed with respect to the debt situation. The focus of these methodologies is related to the debt market, investment banking, and the secondary mortgage market, valuing the risks and returns of the companies and instruments involved. The paper presents an extensive discussion regarding methods of valuation.

From the Paper:

"There have been many efforts by the governmental factions to try to control the problem of debt accumulation. For example, the Balanced Budget Act of 1997 was directed on our nation's healthcare delivery system and was designed to balance the overall federal budget. Because of the aging population, Medicare and the cost associated to healthcare in general, our nation's national debt crisis needed these attempts to right the ship. Our debt situation was so severe that the Balanced Budget Act of 1997 was supposed to be one of the most significant changes to the nation's Medicare program since its commencement. "Certainly, the president and Congress intended for the BBA to dramatically alter Medicare reimbursements. The Congressional Budget Office (CBO) originally estimated the bill would reduce Medicare spending by $113 billion over five years, thereby extending the viability of the Medicare Part A trust fund by 10 years and bringing the budget into balance by 2002." (McKeon, 2004) "

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• Persuasive Essay # 102503 : "The Argentina Debt Crisis"

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