Wednesday, 8 June 2011

Pssstt...Hey Buddy, can you spare some change ?

Remember way back in late 2007 when the first rumblings of the economic disaster loomed ?

Remember how all of the world's economies were shaken by uncertainty, staggering debt, plummeting stock markets and a real estate bubble that effectively wiped out a generation of middle class savings, dreams and hopes ?

Remember when you heard stories about people carrying mortgages worth much more than the value of their homes, credit card balances that were wiping out lifelong savings or student debt that chased people to their graves ?

Well, in the USA, the debt crisis has gone ballistic. Look at the National Debt Clock today.

The USA, by the end of this year is projected to owe more than it's entire GDP. Let's put it another way, the US median Household Income is around $50,000/yr. Now that's mom and dad combined. 

Now look back at the clock above. Every family's share of the National Debt is almost a staggering 2.5x their median income. How'd you like that showing up on your credit card statement next month ? 

This in an era where mom and dad are working longer, for less, if they're lucky enough to have a job at all. Not to mention the fact that prices keep rising (inflation) but wages are stagnant. 

Then, just for giggles, let's toss in the fact that some US lawmakers are toying with the idea of actually defaulting on some of their debt.
NEW YORK (MarketWatch) -- Li Daokui, an adviser to the People's Bank of China, said Wednesday that the U.S. is "playing with fire" by even considering a brief technical default on its debt in order to force more spending cuts at home, Reuters news agency reported. Reuters said Li made the comments at a meeting in Beijing. "I think there is a risk that the U.S. debt default may happen. The result will be very serious and I really hope that they would stop playing with fire," Li said, according to the report.
So the proverbial National Credit Card  is maxed out, they want to raise their borrowing limit AND then bounce a few cheques to their creditors ? Are they and we all collectively insane ? You'd have more security loaning money to Charlie Sheen on another one of his coke benders.

As a nation, the USA had better get used to using the phrase......

"Pssstt....Hey Buddy, can you spare some change ?" 


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