We’re in a dire situation in this country right now. For the first time ever, we are in danger of defaulting on our debt.
The government currently borrows 42 cents of every dollar it spends. The loan is in the form of bonds which they pay interest on and pay back in a certain period of time. More than half of the treasuries are held by foreign investors, but this will also affect the average Joe, like you and me.
Anyone who has shares in a mutual fund that invests in treasuries will be hurt, as will many pensions funds. We don’t expect our government to renege on their obligations, so we think treasuries are a good, safe investment.
I still think they are. The wrangling going on in Congress right now will come to an end eventually. Neither party, regardless of what they threaten, will want this country to default on their debt and bring about the problems that we see in Greece. The debt ceiling will be raised.
I fear this is the way our country will be for quite a long time. Subsidies, tax breaks for the rich and corporations, and general overspending have to be addressed, but with our congressmen and women only caring about which party gets their way, I don’t think it will be soon.
Our government is letting down the middle class. We are the ones taking the brunt of the financial crisis in this country. We are the ones who are losing jobs, filing bankruptcy, losing homes. We are the ones seeing everything we have worked towards getting further away. We are the ones who have steadily paid into Social Security only to see the retirement age raised again and again, and the amount of payments lowered.
We are the ones that keep losing value in our personal retirement plans due to the stock market reacting to moves the government makes. We invest in stocks and bonds because the savings interest rate is non-existent. Sometimes, I think we would be better off to just stuff our money in the mattress.
Not raising the debt ceiling, or even just having this country’s credit rating downgraded, will have a disastrous effect. Interest rates will go sky-high. No one, including the government, will be able to borrow money. Taxes will be raised, leaving the average tax payer with even less money to pay his own debts.
It’s a scary situation. One that every American should be concerned with. Yet, how many really are?