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Debt Is Dangerous. Just Ask America!

The US President Barack Obama recently admitted that America faces a “dangerous stalemate” over how to prevent the country defaulting on its debt.

In fact, Obama and his team just have two days left to:

  1. Either lift the country’s US$ 14.3 trillion debt ceiling
  2. Or see the government run out of money to pay its bills for the first time.

Now the irony is that, in reality, it is no more an ‘either-or’ decision. Doing the first and sacrificing the second, or vice versa, the US is in deep trouble!

If the US government is able to lift the US$ 14.3 trillion debt ceiling, it will just be postponing the death penalty for some more time.

And if the government isn’t able to get its way through by raising the debt ceiling, it will, as I said above, run out of money to pay its bills for the first time.

You will understand the magnitude of the problem if you just put yourself in the shoes of Obama. Though the biggest problem is that in such a case, you – like Obama and his policymakers – are the main accused in bringing yourself to such a sorry state of affairs.

Imagine yourself running out of money…not just to pay the housing loan EMI, but also to provide food for your family. It’s a scary thought indeed!

The only way for you to survive is to take more debt – the same reason the US government wants to raise its US$ 14.3 trillion debt ceiling.

Anyways, if the US’ current massive debt isn’t enough, there is the US$ 114.5 trillion of money the US Government needs to fully fund the Medicare, Medicare Prescription Drug Program, Social Security, Military and civil servant pensions.

In short, it is the money the US knows it will never have to pay all its bills.

By the way, can you imagine how much US$ 14.3 trillion and US$ 114.5 trillion look like?

Click on the image to see how this much money will look like when US$ 100 currency notes are stacked one above the other.

It is outrageous! But that is the situation the US finds itself in.

If you are not able to click on the image, simply click here.


Image Source: usdebt.kleptocracy.us

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About the Author

Vishal Khandelwal is the founder of Safal Niveshak. He works with small investors to help them become smart and independent in their stock market investing decisions. He is a SEBI registered Research Analyst. Connect with Vishal on Twitter.

Comments

  1. Vishal,

    Previous post as mentioned below is not opening up properly. 🙂

    Your Brain on Stocks
    POSTED ON JULY 30, 2011

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