The US economy is screwed. The banks are in serious trouble. The government approved an $800 billion bail out package.
To update my numbers, that's about $2500 per American, man, woman and child.
But it doesn't really affect the poorest Americans. Specifically the ones who bought houses they couldn't afford, then walked away from them. The ones who are the root cause of the financial breakdown. I don't blame them though, for it was the banks who foolishly loaned them a lot of money, and beyond that, the government whose idiotic deregulation led to out of control lending in the first place.
The people on the tax hook are the ones with good paying jobs, which are roughly half of the American people. The other half are only the root cause of the problem but don't make enough to pay big taxes and therefore won't be effected much.
So where are the taxes going to come from when capital gains tax revenues take a major hit.
They could tax fuel, but any politician who did that wouldn't get elected.
They could introduce a national sales tax, like almost every other first world country. Something needs to be done to deal with the gluttonous debt.
I predict the US debt is near a spiralling out of control stage. The stage where the interest is too much to pay off. To balance the budget, the average tax grab per American is a thousand dollars a year just for the interest. That's at a modest interest rate of 3%.
Something that really irks me however is, why is Canada even worse off than the US? The US economy is faltering thanks to the meltdown of the banking system ala the mortgage market. The Canadian economy hasn't felt the same problems. Commodities have fallen from their highs, but are still mostly strong. Our banking system is considered rock solid. So WHY THE HELL is the Toronto Stock exchange down 30% when the NYSE is only down about 20%?
Why is the Canadian dollar weakening?
It doesn't make any sense to me!
If I was a hedge fund manager and I'd bet the Canadian markets would outperform the US markets, I would have lost my shirt!
I look at the factors of the US economy, and it tells me, SCREWED, SCREWED, SCREWED!
I look at factors of the Canadian economy, and it tells me, TOUGH TIMES AHEAD, BUT WE'LL GET THROUGH!
Now for the leadership debates.