This month’s Rolling Stone magazine reports on the United States’ worst president ever:
According to the Treasury Department, the forty-two presidents who held office between 1789 and 2000 borrowed a combined total of $1.01 trillion from foreign governments and financial institutions. But between 2001 and 2005 alone, the Bush White House borrowed $1.05 trillion, more than all of the previous presidencies combined. Having inherited the largest federal surplus in American history in 2001, he has turned it into the largest deficit ever—with an even higher deficit, $423 billion, forecast for fiscal year 2006. Yet Bush—sounding much like Herbert Hoover in 1930 predicting that “prosperity is just around the corner”—insists that he will cut federal deficits in half by 2009, and that the best way to guarantee this would be to make permanent his tax cuts, which helped cause the deficit in the first place!
Last weekend I went to Drayton Valley to celebrate Easter with my sister and her family. I car-pooled with my parents for the 6 hour drive and had a chance to talk about the American national debt problem with my dad. (It’s one of our favourite recurring topics of discussion).
I wondered what will happen to the highly dependant Canadian economy if/when the American dollar/economy collapses. Carrying the tremendous weight of almost $8.4 trillion, it seems to me only a matter of time before somebody (maybe China?) comes asking for their money back. And if it’s not the other countries that have money invested, maybe it will be a large portion of the population that come to the realization that, “hey the government can’t actually back up those bonds for my lifesavings—maybe I should try and get it now before it’s too late!”
It’s obvious that such a scenario would be catastrophic for the States, but I was curious how it would affect “The Great White North”. I’m guessing the biggest impact on the Canadian economy (other than lost money invested in the States) will be the inability to sell our products to the massive consumer giant to the south. In turn, massive layoffs; then an economic depression. Simply saying it’s going to be ugly really doesn’t approach the magnitude of hardships we’re going to be up against.
Attempting to save the world, one dictator at a time aside, the economic decisions of the United States affect everyone, and it’s something that is cause for grave concern. Luckily, China and the US are on such great terms. Oh, wait… never mind.
(Rolling Stone link via Waxy)