US Debt ceiling explained in easy to understand terms

I came across this great analogy on Facebook posted by one of my friends and had to share it with you, it’s too good not too.

US budget debts/ceilings put into an easy to understand perspective….

Lesson # 1:

• U.S. Tax revenue: $2,170,000,000,000
• Fed budget: $3,820,000,000,000
• New debt: $ 1,650,000,000,000
• National debt: $14,271,000,000,000
• Recent budget cuts: $ 38,500,000,000

Now remove 8 zeros and pretend it’s a household budget:

• Annual family income: $21,700
• Money the family spent: $38,200
• New debt on the credit card: $16,500
• Outstanding balance on the credit card: $142,710
• Total budget cuts so far: $38.50

Lesson # 2:

Here’s another way to look at the US Debt Ceiling:

Let’s say, You come home from work and find there has been a sewer backup in your neighborhood….
and your home has sewage all the way up to your ceilings.
What do you think you should do ……

Raise the ceilings, or remove the mess?

It’s important to know that while the US struggles with this very topic, investors will continue to seek shelter in the Canadian bond market. While there is upward pressure on fixed interest rates today, I don’t expect rates to fluctuate to any great degree. As long as the uncertainty remains, so too will our historically low Bank of Canada rate, related Prime rate, variable rates and all fixed rates.

Before I go, when do you expect Canadian interest rates to move upward?

Real Estate Investor Mistakes
Buying A New Home?
Selling Your Home?

Tags : Bank of Canada rate, Buying A New Home?, Canadian interest rates, Canadian rates, fixed rates, Prime Rate, Real Estate Investor Mistakes, Selling Your Home?, US debt ceiling, variable rates