The Wall of Debt
The Wall of Debt
May 02The Wall of Debt
Exactly what do we mean by the wall of debt? And just how big can this wall get before we are able to no longer climb out toward financial stability? In the finance world, debts are considered to be the means of anticipated future purchasing power before you have the cash in hand. Purchasing power is merely how much stuff (goods/services) you can buy. So, in 1970, I possibly could have purchased much more candy compared to 2010, because the dollar commanded more value.
In our homes, debt means we have basically spent a lot more than we’re able to afford. We have seen this across the nation in which several families have hit their wall of debt to a point of no return. The only option for these families has been bankruptcy. This doesn’t just relate to families – it applies to governments. The wall of debt accumulated by nations around the globe is mounting to a degree of no return.
The U.S.
government and nations around the globe (like Greece) have consumed excessively, spent a lot more than they had, and for that reason, the world is facing a worldwide debt crisis. The planet is seeing a wall of debt. Some economists are in fact referring to this crisis as the “Debt Wall.”
This past year Congress set the debt limit or debt ceiling to be $ 14.294 trillion. (Basically, this ceiling is the governments allowance regarding how much debt it may take on.) The country hit this national debt ceiling on May 16, 2011. Treasury Secretary, Timothy Geithner, has found some pocket change and suspended federal retirement fund investments so the country can remain beneath this ceiling until August 2, 2011. Over the following months, Congress will have to understand this mounting wall of debt – and evaluate just how much debt the world can actually undertake before it sees a massive collapse.
Most agree the debates in the hallways of Congress regarding this wall of debt must concentrate on significant spending cuts along with other ways to curb debt.
And the likely discussion will also include raising the debt ceiling (the amount of money the United States government can borrow.) This debt ceiling has been increased 74 times since 1962.
And although Congress has continued to increase this ceiling, there’s a time when the world has reached its limit. And the wall of debt has reached its limit. The United States current deficit is approximately $ 1.67 trillion. The deficits of the rest of the nations around the world are $ 9 trillion, totaling more than $ 10 trillion in world deficits. So what’s the apparent problem – the planet is running out of ready money to borrow. The world is facing a wall of debt due to the fact there is not enough liquid capital to finance the world’s spending habits.
Although we are running out of time before we hit this wall of debt, citizens across the United States may get involved. The US can avoid hitting the debt wall which Greece has hit. But we must ask ourselves – Are we going to continue to boost the wall of debt to risk the future of our children. Are we going to raise this wall of debt for fulfillment of our own spending habits today at the expense of our nation’s future?
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