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Federal in sentence

1805 examples of Federal in a sentence

Why Eurobonds are Un-AmericanBRUSSELS – The emerging consensus in Europe nowadays is that only “debt mutualization” in the form of Eurobonds can resolve the euro crisis, with advocates frequently citing the early United States, when Alexander Hamilton, President George Washington’s treasury secretary, successfully pressed the new federal government to assume the Revolutionary War debts of America’s states.
First, taking over a stock of existing state debt at the federal level is very different from allowing individual member states to issue bonds with “joint and several” liability underwritten by all member states collectively.
Hamilton did not have to worry about moral hazard, because the federal government did not guarantee any new debt incurred by the states.
Second, it is seldom mentioned that US federal debt at the time (around $40 million) was much larger than that of the states (about $18 million).
Even from an efficiency point of view, it made sense to have the federal government service public debt.
Indeed, after the federal government assumed the states’ debt (already a small part of the total), state revenues fell by 80-90%.
Hamilton estimated that the federal government could raise enough revenues to pay approximately 4% interest on the total amount of debt to be serviced – significantly less than the 6% yield on the existing obligations.
Holders of both state and federal bonds were thus offered a basket of long-dated bonds, some with an interest rate of 3%, and others with 6 % (with a ten-year grace period).
In modern terms, the “net present value” of the total debt (federal and state) was reduced by about one-half if one were to apply the usual exit yield of 9%.
Moreover, the new federal bonds’ very long maturities meant that there was no rollover risk.
It would have been very dangerous to expose the federal government to this danger, given that the operation was rightly perceived at the outset as extremely risky.
For the country’s first few years, debt service swallowed more than 80% of all federal revenues.
The slightest negative shock could have bankrupted the new federal government.
Fortunately, the opposite happened: federal revenues tripled under the impact of a rapid post-war reconstruction boom, and continued to grow rapidly, aided by the country’s ability to remain neutral while wars ravaged the European continent.
They could point to the precedent set by Hamilton, and had probably invested on the implicit understanding that, if necessary, the federal government would bail out the states again.
But, despite foreign creditors’ threats, the federal government did not come to the rescue.
Also in the 1990’s, largely thanks to the leadership of then-President Ernesto Zedillo, Mexico adopted non-partisan federal electoral institutions that in 2006 proved able to resolve successfully a disputed election.
Attackers based in China recently broke into the US Office of Personnel Management and stole up to 22 million files with sensitive information on federal employees.
Under the guise of tax reform, late last year Trump signed legislation that will increase the federal budget deficit by $1.5 trillion over the next decade.
Never mind that deficit spending makes no sense when the economy is nearing full employment: this sharp widening of the federal deficit is enough, by itself, to push the already-low net national saving rate toward zero.
Although the French-speaking Belgians started the European Industrial Revolution in the nineteenth century, they are now living in a deprived rustbelt in need of federal subsidies, a substantial amount of which comes from taxes paid by the more prosperous, high-tech Flemish.
Perhaps the greatest of these is Germany’s expectation that monetary union will spread German influence -- not only through the European central bank to be based in Frankfurt and closely modelled on the Bundesbank, but also because political reforms will move Europe decisively in the direction of a federal state, with strong federal institutions protected from political interference, modelled on those of the Bundesrepublik, with Germany the biggest constituent part.
In a number of landmark judgments, the Court has expressed skepticism about any move toward a federal EU.
After all, the eurozone is not a federal country, and the Treaty on the Functioning of the European Union (article 123 in particular) explicitly forbids monetary financing of the member states, which was Germany’s condition for giving up the Deutschmark.
Take, for example, the ten-year $14.5 trillion federal government spending binge proposed by Democratic presidential candidate Bernie Sanders – a program judged to be without any semblance of fiscal integrity by leading economic advisers within the very party whose nomination he seeks.
Let’s ignore for the moment the vexed constitutional issues that will be raised if a US state enacts legislation that conflicts with federal law.
Opponents of the legislation point to the resulting increase in the federal budget deficit, which will add $1.5 trillion to the government debt over the next ten years.
First, they will offset the contractionary effects of the expected increase in the federal funds rate and the shrinking size of the Federal Reserve’s balance sheet.
A tax on carbon dioxide emissions or a slowdown of spending growth for federal entitlement programs can start to bring the debt ratio back down toward the 50% level that prevailed before the 2008-2009 downturn.
Russia’s federal government and regional authorities are clearly alarmed by this rapidly growing civic activism.
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