money madness

News today that the US Government could be “out of money” in two weeks is more than a little alarming. Should Congress fail to pass the 2011 budget, the US Government could be forced to “shut down”.

Today, the US Debt is – and you might wanna sit down for this – $14,159,640,000 – and it went up about a million dollars in the time it took me to type out that 12 digit number. Fourteen trillion, 159 billion, 640 million dollars. OMG. That’s a lot of dough. $45,000 worth of dough, in fact, for each of our american neighbours.

On our side of the border, it’s not great. But it’s not that bad. Our debt is a mere half a trillion dollar – or approximately $17,000 per person.

So why is national debt so terrible? Can’t we just print more money? We have our own mints afterall.  Sure we can. Run that press. Trouble is, it’s an invitation to inflation. And I’m sure you’re not the only one who’s noticed that the price of food is going up. If we print too much money, as can easily be done, it looses value. If it looses value, things just cost more. You can hold the line on inflation but then interest rates go up. Which means the money holds more value, but the price of borrowing and debt goes up. Oh la la. Cercle vicieux, n’est ce pas?

But to whom do we owe this money? Most of it is owed to ourselves. No biggie, right?(I’ve borrowed from my own future from time to time, I’m afraid to say). But some of it is owned by and owed to foreign countries. And they might not take too kindly to late payments. Or they could find more interesting things to do with their cash.

So how do we fix it? By electing the right people. And who are the right people? The ones who would cut spending? But who wants to vote for less? Isn’t more better? And in this country, our minority governments, far from ensuring a more cooperative approach to running a country, have instead led parties to compete for our votes by spending and or promising to spend, are you ready for this, even more of our money. Money we haven’t even earned yet.

Unlike the United States, failure to pass a budget in Canada leads directly to an election for if the government  loses the confidence of the House (and a budget is a confidence motion) then they are forced dissolve parliament and call an election.

So the next few weeks will be mighty interesting. Maybe all the US federal employees can follow our election campaign while they wait for their government to re-open. At least we’ll get to know each other a little better in the meantime.

Case in point, Jon Stewart’s comments from December 08 comparing our political plight to their own with President Bush as recounted by the morning crew at Canada AM.

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