Is America Going Broke

Today I was reading in MacLean’s magazine an article written by Steve Maich titled “Is America Going Broke?” This article concerned some very disturbing facts about the health of the American economy and projections of its future. Mainly the article focused on the current American national debt of $7.7 trillion dollars and the inevitability of it getting much larger if current trends of taxation reductions and spending increases are not reversed. The numbers are staggering! How much is a trillion dollars – a stack of $1000 dollar bills 109 km high, thats a trillion dollars. America's long-term budget shortfall is approximately US$43 trillion, about four times the size of the nation's economy, and more than 20 times the federal government's annual tax revenues.

Egad!

There are those in the United States, both Republican and Democrats, who are fully aware of the problem and are sounding the alarm. But, given some of the information provided by Mr. Maich and my thoughts of the attitudes of the Bush Administration, it seems unlikely to me that the trend will be halted before some severe economic event occurs.

And that has some dire implications for Canada. Simply put, the health of Canada’s economy is fused to that of the USA. While our economy is currently sound and growing, should the American economy collapse we will be hard hit. Fully 80% of our exports are shipped to the USA.

I have so many misgivings about the current US administration - the extreme right stance it takes on most issues - the fear mongering - the war in Iraq and the lies to the American people to gain their support. And now I learn that they are probably going to drive the USA into bankruptcy pursuing their policies.

I have no expectation that anything will happen to address this problem for the next four years. Hopefully, for whomever becomes president in 2009 it will not be too late. Americans are our closest friends and for the good of us all, I just keep my fingers crossed that they will be able sort this one out.