This was written way back in 2009 and now we know that the US Fed (and Canadian too) have a deficit bigger than that. This is all part of Modern Money Theory which I do not think works, but only time will tell. Debt is always a bad thing in my book.
That is a Credit Card Debt!
Here in Canada we are flagelating our government because they are going to be running a budget deficit (they are going to spend more than they make this year) of over $50B, and rightfully so, given we have been runnnig surpluses for several years (i.e. making more than we spend), however we are humble overspenders compared to our brothers to the south (the USA). The estimate now is that this year the US Federal Government will run a deficit (remember that is overspending this year’s budget) of over $1 Trillion, wow.
That is effectively the same as giving every single human being on the earth (assuming the Trillion they are talking about is 10 to the power of 12) $140.00, this year. Canada’s deficit would only give every human a paultry $7 , as you can see we Canadians are small time in this overspending world.
How will this be remedied in either country. Some are arguing in both cases there are 1 time bail outs that do not reflect actual spending habits (Bank Bail outs, Car Company Bail outs, etc.,), and that may well be the case, but what is going to be the fall out trying to pay back this deficit? Canada had been paying back the National Debt (i.e. the money we owe, from accumulated deficits over the years) however this latest set back is not a good thing.
As with personal finance every time a deficit is run for a year, it will eventually need to be paid back, Live Now but you will Pay A Lot More Later.
Local Ponzi News
If you think Bernie Madoff is a uniquely American issue, think again, evidently a new collapsed Ponzi scheme has been uncovered in Montreal. Earl Jones, the advisor in question is missing, as is all of his “clients” money as well.
This begs the question, do you trust your financial advisor? Are you sure you know where all your money is, and why it’s there?
That would make good logic if they spent the money ON their population. ie: infrastructure, health care, daycare, schools, housing, homelessness. NOT funding wars, NASA etc.
Traciatim beat me to it! I was going to suggest the US has 10X Canada’s population, so by comparison their relative debt is only $14.
This is happening at the macro and the micro level. If whole countries can’t spend wisely, what kind of message does it send to it’s citizens? No wonder personal bankruptcies are on the rise when our own government sets the example by spending now and promising to pay later.
I think that’s a little bit of an unfair comparison, since we only have 16,832K and they have 140,196K employed people. That puts our 50,000,000,000 / 16832000 = $2970 per worker, vs 1,000,000,000,000 / 140196000 = $7132 per worker.
So although the actual figure is 20 times larger the amount per worker is only 2.4 times as bad.
Point taken, however, neither should be proud of these horrible numbers.