Why is November 23 important and why could it mean so much to the financial future of this country? If you can remember back to August when Standard and Poor's cut the United States' debt rating from AAA to AA+, it was all about the rating service's perspective that we were not doing anything to curtail our out of control spending (I wonder why they would think that?). The idea was hatched that the debt ceiling would be raised without any accompanying spending cuts but that promised spending cuts would come by November 23.
What Is The November 23 Deadline?
A date set by Congress as part of the deal to raise the total amount of debt that the United States could officially have on its books. The so-called Super Committee comprised of six Republicans and six Democrats must find 1.2 trillion dollars in savings over the next decade. If they don't, automatic across the board cuts will go into force beginning in 2013.
What Does This All Mean To The Average Person?
We are on the same track as Greece and Italy. If you want a glimpse into the future of where we are headed, look no further than Greece and Italy. Both of these countries are going through a complete meltdown right now. Their presidents have resigned and new leadership has been put into place. Angry mobs are spilling out into the streets to protest against the austerity measures that must be enacted.
While sitting at my computer writing this story it is being reported that the November 23 deadline will simply be ignored by Congress. They will pass another law freezing the deadline and no across the board cuts will take place as agreed. Is this all beginning to sound like someone who is manufacturing one story after the next to fend off the repo man? The 1.2 trillion in cuts over ten years was really nothing more than scratching the surface. The idea that our elected officials can't even get this done really does tell the story.
Where Will This All End?
Honestly, I see no way now that the U.S. can avoid a complete financial collapse after this latest debacle. Without the follow through on this most recent budget cutting deal, there is more than a good chance that our debt will be downgraded once again. All it will take is for the interest rate on the debt to move up by one to two percent and it will take virtually all of the inflow of the money to the government just to pay the interest. Some predict that day will happen in the next three to five years, but if we face another downgrade it may be even sooner than that. Hang in there for some bumpy days ahead.
Helping you make the most of God’s money!