DEBT DEFAULTING

As you all may know our country is in a huge budget crisis. Our national debt is now at 1.4 trillion dollars. The number 1.4 trillion seems unreal to most people, but the effects of this large number are very real.

The nation is making cuts just about everywhere you look. From education to health care, we are laying off hundreds of people everyday. Unemployment rates are rising, the housing market is declining, investors are scared of our economy as it is.

So on top of all of that there are government officials toying with the idea of defaulting on our debts(our national debts). The idea of defaulting is essentially saying "We are not going to pay our bills and interest owed to our creditors".

If this is allowed this could destabilize not only our economy, but the economy world wide. This has caught the attention of one of our biggest creditors, China. China has stated that this could be a very bad situation if it is let to happen.

China holds more then 1 trillion dollars in Treasury debt to date. So its concern with this holds considerable weight. If we default on our debt it would definitely undermine the value of the U.S. dollar. As it is now the value of the U.S. dollar is declining more and more without defaulting.

The U.S. dollar is the world's trade currency at the moment. If the U.S. dollar is allowed to have no value, other countries will find a currency that is valuable to trade in. We could possible lose our nation's financial power if we are allowed to default. Other nations may start using other currencies such as the Euro to trade. The Euro has gained some trading power as of late, due to its stability in value.

Many foreign countries economies are tied up with U.S. financial developments. Countries like India hold 39 billion dollars in U.S. treasury debt. They cannot afford for us to default, because it would cause catastrophic affects to their economy.

Does our government allow us to default on our debts? No. If we do not find ways to pay our bills and interest owed, things are taken away from us. Our homes, cars, wages are garnished. So if we are not allowed to default on our debts, why should we allow our government to default on theirs.

Can you imagine China saying "Ok so you cant pay us, so we will take some of your U.S. land and businesses as payment instead". That might seem crazy, but it isn't that far of a stretch.

There is no real debate here, as to whether to default on our debt or to raise the debt ceiling. We must raise it to continue to have a hold on our financial power in the world. This is not an easy answer because both cases lead to bad situations. Raise the debt ceiling obviously increases our debt, but to default we would lose our ability to get out of debt. Countries would no longer look to us for trade because our currency has no value. That to me is worse.

What we need to do is stop borrowing money, only to send that borrowed money to a foreign country asking for aid. We need to pay our bills.

It's as easy as saying, you have a bill with a total of 20 dollars. You must borrow 20 dollars just to pay that bill. But you have a friend (or so called friend) that needs 20 dollars as well. Do you lend the money or pay your bill? The answer is simple, you pay your bill.

So why does our government want to complicate this issue by debating whether to raise our debt ceiling or not? Do they not realize the affects it could have on their own citizens? I think they do. I also believe that this is all political talk with our 2012 elections just around the corner. But you never know with our government.

What do you think about raising our debt ceiling? What do you think about our government contemplating on defaulting on its debt? Tell us...

Agree or disagree at least we know what the PEOPLE think.L2