Alright, 2nd August 2011 is definitely going to be remembered as either the day that marked the downfall of a colossal economy like the USA or the reference day that saved the world from a massive economic recession.
Whichever be the reason, one thing's for sure; the world's trust on an economy which maintained a 'AAA' rating ever since its constitution and an economy that has so long acted as the beacon of world trade; the economy that gave the world the priceless DOLLAR; UNCLE SAM'S UNITED STATES OF AMERICA , is surely going to weaken.
The hyper links regarding the reason for this debt crisis have already been given in my previous post. But to briefly explain the "hows and whys"..let's take this example :
Your parents have set a certain limit within which you can borrow money from them as and when needed in a month, and of-course this money you refer to as the palatable pocket money. Let's imagine that that you spend all the money and are about to exceed your limit ; what are your options now ?
Whichever be the reason, one thing's for sure; the world's trust on an economy which maintained a 'AAA' rating ever since its constitution and an economy that has so long acted as the beacon of world trade; the economy that gave the world the priceless DOLLAR; UNCLE SAM'S UNITED STATES OF AMERICA , is surely going to weaken.
The hyper links regarding the reason for this debt crisis have already been given in my previous post. But to briefly explain the "hows and whys"..let's take this example :
Your parents have set a certain limit within which you can borrow money from them as and when needed in a month, and of-course this money you refer to as the palatable pocket money. Let's imagine that that you spend all the money and are about to exceed your limit ; what are your options now ?
- Ask your parents to increase your pocket money limit or "CEILING".
- Cut down on your expenditures and save more money to never exceed the set limit.
The above example when considered keeping in mind the state of affairs in the US has given rise to a DEBT CRISIS.
USA had a fixed debt ceiling and when the ceiling was reached things started getting murky. The govt's vault has little money left to pay back the debts, to pay the dues and to run the economy.
SOLUTION : Well the Republicans and Democrats of the US Senate are not ready to arrive at a common consensus.
The Republicans want Obama's government to cut their expenditures to pay back the debts.
Whereas the Obama administration thinks that increasing the debt ceiling is the only viable option out.
RESULT : 2 August 2011 has been predicted as the day when USA will face default ( inability to pay back debts); leading to grave outcomes for both the US and the world economy.
To wind up, the internal commotion in the US Senate has jeopardized the world economy. with half the world economies losing faith in the state of affairs of the US.
Just 2 more days and the result will be in front of us.
Vive la WORLD ECONOMY !!
PS : Being a 4th year engineering student, the placement season for me is just about to begin. And frankly if at all the world enters the gloomy recession, I'll cuss MR. OBAMA for the rest of my life.
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