The United States has run through its debt cap of $14 trillion US dollars. This will hopefully give the country a little bit more time to raise funds, but also pay its bills.
In a last minute meeting yesterday President Barrack Obama said “ I want to announce that the leaders of both parties (Democrat and Republican), in both chambers have reached an agreement that will reduce the deficit and avoid default, a default that would have had a devastating effect on our economy.
Now if any of you were paying attention during that Business Management 101 class, we would all know that it is never a good idea to pay off your loans using debt, it’s just something that does not make sense no matter how attractive the interest you have to pay is.
But since the Great Depression that States economy has largely been dependant on debt. Some owed by the Federal Government, whilst nearly two thirds is public debt that is owed to the people, businesses and foreign governments. The rest is owed by the government itself and is held as Government Account Securities.
The States debt is the largest in the world, rising by between 6 and 9 trillion US dollars even before the economic crisis which began in December 2007.
I secretly prayed the United States would not raise its debt ceiling and suffer the embarrassment of defaulting on trillions of US dollars it owes to China and Europe. But then I realized, that would be no good for anyone as the “third world” which is us, kind of depends on them to do well for us to keep on our continuous hustle.
Economists seem torn as to what the latest developments in the US mean for emerging markets, especially Africa. We were hit the last time the country experienced some financial trouble.
Some economists say Africa economy is strong enough to survive any financial hits coming from the West, whilst others say all the US is doing is buying itself time, but the debt is still there and its grace period may run out in a matter of months.
All I have to say is…man I wish I was a powerful country….