As the clock ticks towards our country's debt deadline, the grip of anxiety, has got it's nasty claws into the average american's mindset.  August 2nd, one week away, makes many wonder, if this scenario will play out until next Tuesday.  The truth of the matter is, debt default is serious business.  While many among us, would rather not think about government, politics or repercussions of a default, the fact of the matter is, a default will affect us all.  

Economists believe, the U.S. defaulting on its loans, would send interest rates sky rocketing, and drive the stock markets down around the globe.  At a delicate time, when recovering revolves so heavily on home loans and banks abilities to administer loans, this would inevitably put a stop to all loans.  

The United States will lose its AAA debt rating if a default occurs.  When a country has a perfect record like AAA, an investor knows positively, that they will receive their payment on their loaned money.  A default, will inevitably put the United States at a vulnerable position, where investors don't want to carry the outstanding loan of our country's bad baggage, due to not knowing if they will get a return on their investment.  This will increase the borrowing cost, which will further increase the debt.  The U.S. treasury securities, are the most widely owned in the world, included in the securities are pension funds, insurance companies and banks.  If the treasuries default, markets across the globe could stop and no longer have the cash or assets to pay out.  Oh yeah, and the face value of our dollar, will take another tank across the globe, which could be the birth of hyper- inflation.  Back in the late 90s, in my own college economics classes, all was blue skies and unicorns, so I had no real reason to spend too many late nights burning the midnight oil for "hyper-inflation".  Now, I wish I would of spent more time in the dusty dark corners of the Non-Fiction aisles in the library, cause this is a big one!  

Hyper-inflation=monetary inflation occurring at a very high rate.

High increase in prices at a rate of 50 % or more a month, on goods and services.

I am no expert, but with stagnant wages, this could be the unneeded push our country doesn't need, over a cliff.  Struggling families could be faced with higher prices for food, gasoline, basic utility services etc., and at a huge rate increase.

Besides the above mentioned, if a default occurs, our government would be faced to make immediate cuts to pay the bills.  If we default and choose to pay creditors first, cuts will have to be made to make the payments.  These cuts could include FBI, Medicare, Social Security, Military pay, USDA Food Inspection etc.  These cuts would lead to mass layoffs, further increasing our high unemployment.  Sadly those living solely by means of Social Security, could find themselves without.

Regardless of which side you are on, one has to realize the devastating effects of defaulting on our loan obligations.  In our personal lives, we know that not making our loan payments, could affect our credit worthiness and ability to pay our bills, for months to come.  The United States has way more to lose, than having a late payment fee applied, for missing their credit card payment.  It's time for the kids to stop playing chicken, and get back in the school house.  Class has begun!

Remember, the best you can do is…..get up, stand up, but please…do something!

Oh Eric.....say it isn't so!!!

Oh Eric………say it isn't so!

Eric Cantor Congress Majority Leader, has been in the midst of debt ceiling negotiations with our president and other members of Congress.  Eric holds the second highest position, and is deputy to Speaker John Boehner.  His latest task in debt negotiations, is to represent his other members, in dealing with a deal of $4 trillion dollar deficit reduction.  The reduction deal talks have included, social security, medicare, medicaid and closing tax loopholes for the wealthy. So far, Republicans seem un-moved on compromise, as they keep their stance of no tax increases.  

As it stands, if our debt ceiling isn't raised by August 2nd, our country will go into default.  No one knows exactly the repercussions of default, but based on our own personal debts, we can assume this could be catastrophic.  Affecting the markets globally, this could make the United States more vulnerable than before, and things could quickly spiral out of control.  So why can't we just get along for the sake of our country's future?  Maybe, if we take a closer look into what driving the debt talks, we can get a clearer picture?

Republicans stand on their firm belief that, increasing taxes will only further burden our businesses, and encourage them to stop doing business in our country. Their main issue being our country is spending out of control on entitlement programs, and until the spending is nipped in its proverbial bud, they won't compromise on the debt negotiation.  Democrats insist on producing new tax revenue from the wealthy, (anyone making over $250,000) and ending tax loopholes for millionaires and billionaires. 

With the debt ceiling fears hanging over the whole country's head, we are hearing of Mr. Cantor, Mr. Boehner and Mitch McConnell, all insisting, they will not budge on their stance of "No New Taxes".  Mr. Cantor even walked out of debt negotiation talks, due to his persistence of the GOP pledge.  Obama, has even laid out the skeleton of medicare and social security for them to lick on, and maybe take a bite at, but so far, no good.  Just when one is left wondering what in the name of all that is good,is going on?There comes a light ahead in the distance.  This light is getting clearer and clearer……..as reported from Huffington Post, Salon, Daily Kos, Politics USA, Wall Street Journal, and many other credible sources, comes a story that could turn your stomach sour.  This is the story of Mr. Eric Cantor, and his bet against the United States of America.  According to news sources, Mr. Cantor bought up to $15,000 in shares of ProShares Trust Ultrashort 20+ Year Treasury ETF~this is to say, he took a short position in long government bonds, or in other words……he is betting on inflation and default.  I remember in history class learning about treason, but I am sure I could use this nibble on a future date.  No, this is not good news, but unfortunately, this is our country's news, so get up, stand up, but please….do something!

Shared Sacrifice

The Fourth of July always reminds me America's great patriotism.  Even as a child I remember watching the fireworks display, and feeling proud of America's great freedom and democracy.  Everyday Americans have given much, for our country to be the greatest to live in.  This is a shared sacrifice among many, for the better good of our great land.  Individuals have come to our great country, in search of the dream, that we call The United States of America.  

From the years of 1892 and 1954, over 12 million people entered our great country through Ellis Island, off the New York Bay.  People came from all over the world, in search of our American dream.  The United States became the great melting pot for cultures and religions.  A country diversified enough to embrace everyone's differences, and mold our country into the great stellar force that it is.  

To protect what we have built for our future generations, our country has had many men and women serve, and unfortunately die, protecting these freedoms of our great land.  Patriotism, is the driving force, to mold individuals, into one.  Our great constitution and patriotism, makes The United States of America, exceptional.  

During World War II, looking back in history, you find that shared sacrifice, for the better good of the country, was everyone's duty.  The government rationed food, gas, clothing etc., to control the supply and demand.  Rationing prevented the wealthy from buying up all the supplies, and then causing shortages and high prices.  Through sacrifice, times were tough, but there was a boom in employment, as everyone had a job to do.  People even planted their own "Victory Gardens", to grow their own fruits and vegetables, to keep costs down.  Few complained, or didn't comply, for everyone knew the men and women serving were the true sacrificers.  

Times may seem grim, currently with our economic status, but sacrifice in our country, has always been a foundation for what makes our country thrive.  Everyone must share in sacrifice, for the greater good of our country.  If paying taxes, and working longer hours to pay off our debts is the only solution, then we all must do our parts for the greater good.  What better way for the big businesses of our great country, to give back to a nation that has made them leading entrepreneurs, than to pay their fair share.  With everyone sharing the same motive, our country can get back on track to being, our great land of liberty.  

Remember, corporations are not people, and get up, stand up, but please do something!