The August 2nd Deadline... Apocalypse Now??

While in no way making light of the situation, the deadline of the raising of the debt ceiling reminds me of the dangers of Y2K.  The difference is, we really didn't have an idea of the dangers lurking other than we could all lose power and our digital clocks would rise up and attack.

This crisis has me worried about a few things.  First and foremost, will the more senior members of my family get the SS checks?   I have also heard that the military may not get paid on time.  Could there be two more deserving groups of people to get their money when they need it?

I also started to think about when this love affair with debt began.  I have long since become a cash on the barrel head person-- debt is simply too scary these days.  I have also taught my kids that credit cards are the devil's plaything!

I took a quick look back in history to find that the debt ceiling was first set in September of 1917 to fund World War I.  This was done under the Second Liberty Bond Act.  If you take the $11.5 billion dollars that was authorized under that act and allow for inflation, at 2011 dollars, it equals about $193.2 billion dollars.  So this ain't all inflation folks! 

In the 94 year period since the Second Liberty Bond Act was authorized, the debt ceiling has been raised 102 times.  I found a nifty little graph that compares the debt ceiling to the GDP ratio.  You can very clearly see the Great Depression in this graph.  The ratio was at its lowest in January of 1981, and at its greatest in February of 2010. That by the way was the highest it's been since World War II.

This is what I am the most concerned about.  I tend to think a lot of what is going on now is political posturing.  If the debt ceiling could be raised 102 times in the past, why not now?  Yes, I know the spending has to stop.  Why not figure that out without the economy crumbling around our ears?  From what I have heard on various newscasts, so many angry people have written their congressman for or against the action, that the servers have crashed!  Does this mean that the more complacent of us are finally sitting up and taking notice?  Is it because it could really hurt us this time?  Perhaps...now I know I'm getting a little silly here...does it mean people may ....VOTE?

I personally feel that the ceiling will be raised by the 2nd.  If I am wrong, then I can only attribute it to the fact that despite the fact that life hasn't been that great for a lot of us the past few years, I still, somewhere deep in the recesses of my brain still have a bit of faith in the government.  Of course that too could go down the drain if I am mistaken.  Stay tuned.