Tuesday, July 12, 2011

US Debt Ceiling Crisis Affects Us in Canada

America is in a deep financial crisis that could cause them to default in the coming days if President Obama and the Republicans can't come to an agreement.  Right now both sides are very far apart and have until Aug.2nd.to make a deal.   They are in a very difficult situation, they're in for some pretty tough times.

The Democrats want to raise taxes while the GOP wants to make cuts to entitlement programs.  Neither are budging right now.  They're debt right now is whopping $14.3 trillion and increasing everyday.  They are in deep trouble and even if they come to a deal it will not be the end.  They're still going to somehow have to eliminate their deficit and pay down that debt. They won't be able to even make the interest payments on that debt nevermind the principal. They've been spending, borrowing and  printing way too much money. They have to stop that number one. Number two,they have to drastically cut spending and reduce the size of government big time. No matter what  Americans are in for a  long tough slog. 

Should we be concerned?  You bet! . If the US defaults, it  will send shock waves through the world. It's affecting the markets already. It could result in another recession if not a depression.  There's not a darn thing we can do about it.   except maybe to get our own house in order the best we can both at the government level and our personal finances and pray that things will turn around.
Canada could be facing fresh economic headwinds, with rising unemployment and troubled government finances – and there’s not a thing political leaders in Ottawa can do about it.

The United States is gripped by a political crisis over raising that country’s debt ceiling, with time running out until the Aug. 2 deadline. If that deadline passes without a deal, the world’s largest economy risks defaulting on its debt.

Yeah our economy seems quite good right now. The US is still our largest trading partner and whatever happens it does affect us. Remember in the Eurozone things don't look particularly healthy either.

We are not an island. We are living in a global economy.. Do whatever you can to prepare yourself just in case.  We could be in for some rocky times ourselves   You know what they say, prepare for the worst but hope for the best.