Correlation of Debt Ceiling, Penny Stocks & Democrats
Penny Stocks are the mini stocks presented by the companies with low market capitalization. These are traded on OTCBB or pink sheets and are considered to be highly unreliable. However, in the bunch of the risky stocks, there are some genuine companies giving the best to their clients and have the prospects of leading towards the highest ROI.
We shall understand the concept of Debt Ceiling related to penny stocks. When the World War II ended, Western governments used to spend more than the taxes they collected from the people. It was a kind of over-draft of the limit which led to the debt ceiling.
In terms of the US government, the debt ceiling is the maximum amount allowed by the Congress to owe to the government on any day. The assets of the government like securities and bonds are used by it to raise the money. There are issues like historical debt, inflation, and credits to look for the government for continuing the expenditure more than they give into the treasure.
The rise in debt ceiling forces the government of US to be selective in making commitments for their payments. In the past times, there was a phase when the US government was at a chance to force the selective default. It is not possible to decide the late payments and waiting phase of some sectors. The present status of the US Dollar has shown that the US credit rating is on the higher side. It is seen from the past evidence that US government with Democrats has resulted in better securities in terms of finance. It might be a matter of luck but Democrat government has led towards better returns on stock investments than the Republicans. The present laws initiated by Trump are on the progressive side and it is quite probable that this time, there would be a change in the financial stats. The history of Republicans, who have attained less progressive side, might change and it would reflect a better state of the newly arising companies.
The ideologies of Democrats and Republicans have always varied and this is the reason for their variation in handling the financial matters. President Obama proposed the spending of tax increases and cuts to reduce the debts but had to increase the debt ceiling in the short duration for avoiding any default cases. The concept of Republicans in the present times with a statement of corporate taxes (22%) by Donald Trump has still to enact the social programs and ideas.
There are many new initiatives taken by the present US government and it is anticipated that the ideologies of Democrats will be replaced by the actions of Republicans. Penny stocks will hit the higher levels and the growth of small segment companies will probably lead towards the better results for the economic security of the nation. The time will only tell how the small companies will lead towards best results for the micro caps.