This forum is not purely dedicated to legal discourse. While I may attempt to 'raise the bar' with some pieces relating to law and being a criminal defense lawyer in Toronto, I also plan to use this blog as a medium to express my often critical thoughts on the daily grind that is life. Throw in some random videos and internet fodder, and the bar is sure to be lowered.

Saturday, 16 July 2011

The Debt Ceiling - Zeitgeist Addendum

There is currently a fierce debate underway in the United States over the country's "debt ceiling."  The problem faced by our neighbours to the south, and inferentially any other country using a fractional reserve banking system, was ominously forecast in 2008's Zeitgeist Addendum (see video on the right)

You may be scratching your head as to what exactly a "debt ceiling" is, and why politicians are so up in arms over it.

The debt ceiling is simply a cap on how much money the US federal government can owe. This debt includes both public debt (money that is owed to individual investors, foreign governments, pension funds, etc) and intragovernmental holdings (money that is owed to various government programs).

The Debt Ceiling - IllustrationThe debt ceiling has been raised often in the United States. As a matter of fact, CNN reports that the debt ceiling in the United States has been raised 74 times since March of 1962 and 10 times since 2001.

The debt ceiling is currently set at $14.294 trillion. The US government currently owes $14.243 trillion. According to US Treasury Secretary Timothy Geithner, the debt ceiling must be raised by May 16th, or else a "toolkit of emergency measures" will be needed to continue funding the government. 

What would happen if the debt ceiling wasn't raised? In short - disaster.  So, what's the alternative?  Watch the video...

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