Thursday Thoughts: Seriously, What the HECK is the Debt Ceiling??!

So a client came into the office the other day (didn’t happen at all) and asked me the following question (an imaginary question from my imagination): “Mr. Funny Accountant, what the heck is the “Debt Ceiling” and why do I even care?”

Being the of the curious variety of person, I looked into the topic (and the related issues that have been pasted all over the media recently) and discovered some interesting stuff:

  1. No democratic country in the world other than the U.S. and Denmark has a debt ceiling (Denmark’s is basically set to infinity).
  2. The debt ceiling in the U.S. is the limit to how much can be borrowed by the Government to fund ongoing spending. However, since the budget passed for the fiscal year already has spending commitments built into it, that budgeted amount WILL BE SPENT regardless of some fancy ceiling.
  3. The word “gullible” is not actually in any English language dictionary (I got sidetracked a bit…winky face).

This same imaginary client asked me what the Debt Ceiling means to Canada and why we should care. There’s no complete answer to that question…but it seems to this simple Accountant that the whole thing is driven by politics. Once the “issue” is settled (as it was on the evening of October 16th juuuuust in time), it creates the illusion of “having gotten the job done” and a job well done at that.  A political gain is still a gain so good on them for taking advantage. What it means to Canada is just a touch more uncertainty since, like it or hate it, we rely on the U.S. for much of our growth and prosperity.

And now, after spending a good chunk of my evening learning about the ridiculousness of the U.S. system, I go eat cake. With milk.

Happy Thongy Thumpy Thursday Threading Themes THOUGHTS!!

Sincerely,

The Funny Accountant.

Don’t forget to follow me on Twitter if you like what you read!  And as always, if you have tax questions, need advice on your personal taxes, corporate taxes or anything else accounting or business related, please contact The Funny Accountant/President of MK & Associates at mitch@mkassociates.ca

And for a witty and insightful read, check out the wifey’s blog. It’s funny and good.

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