Economic and military super powerhouse United States of America officially hit its legal borrowing limit on Monday. That means the US government has debt of a mind-boggling US$14.3 trillion and if the lawmakers do not increase the borrowing limit by August 2nd, the government will be at risk of an unprecedented default. The result will be catastrophic to anyone who holds US bonds, from China to US itself. Of course that won’t happen because the US Congress will surely raise the debt ceiling by then to avoid a default.
Actually since 1962, the ceiling of borrowing has been raised a whopping 74 times. And every time the Congress approves the annual budget it is in fact raising that ceiling and the ceiling stands for how much money the government can borrow. So, what’s the purpose that this limit is increased every time? It just so that the Congress can check that the government does not spend more than a fixed amount although seriously it doesn’t serve any purpose other than that because the government will still, well, spend like there’s no tomorrow.
Back in 1981, President Reagan once said that with a stack of $1,000 bills equivalent to the U.S. government’s debt, it would be about 67 miles or more than 107 kilometers high. Of course now that the debt now has reaches $14.3 trillion, it would be 900 miles or more than 1,448 kilometers tall. If this comparison is not enough to make your jaw drop, consider the following:
- In $1 bills or notes, the current debt of $14.3 trillion will bring you to the moon and back – twice
- The U.S. borrows about $125 billion per month
- With the amount of debt, the U.S. could actually buy each of its 300 million residents and Apple iPad
- If you play standard Monopoly board game, the max you can handle is $15,140. The U.S. actually borrows about 185 times that amount every minute.
- In one hour, the US borrows about $168 millions
- In a 31-day month, the US borrows about $4 billion per day
- The US government borrows more than $40,000 per second.
- The net worth of Bill Gates of about $56 billion could only cover the debt for 15 days while Warren Buffet’s $50 billion could only cover the deficit for 13 days.
The US government is expected to raise the ceiling of borrowing, print more money and it’s business as usual.
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