Will The U.S. Ever Default On Its Debt?

Had Democratic and Republican members of Congress not voted to approve a deal to raise the debt ceiling on Monday, today may have been a reprise of Black Tuesday. But they did, and it won't. For now.

Neither side got what they fully wanted, but the deal was a compromise between President Barack Obama and leading Congressional Republicans in a day and age where the word bipartisan has become a sign of weakness. In sum, it will allow the United States to borrow up to $2.1 trillion and cut $2.4 trillion in federal spending over the next decade. Notable additions include that of a new twelve member committee to recommend further spending cuts and a proposed amendment that would require the federal government to have a balanced budget, a lack of which has raised this country's debt ceiling time and time again.

For those of you reading this who didn't know or didn't care about the consequences of the United States defaulting on its debt at this time, here's the sobering truth. Those dependent on federal aid, specifically the elderly, disabled, and armed forces, would have had to wait weeks, even months, for compensation. Federal employees and contractors would have their paychecks suspended, as well. Interest rates on mortgages, loans, and credit cards would've skyrocketed. Stock markets, both in this country and the world over, would take a nosedive. Take all that, combined with the fact that the U.S. economy is moving upward at a snail's pace of 1.3% right now, and this country's financial reputation would've been permanently tarnished.

But most Americans aren't upset that a debt deal was passed. Its the political grudge matches that have got them fired up.

No Room for Error, Part I

Life is fragile. There's no guarantee you'll live to see tomorrow or even the rest of today, for that matter. If what you think, say, and do are reflections of your character, may they be upward focused.

For most people, this consists of going to school or work to better themselves and their community. Every day, week, month, and year is another step toward achieving their ultimate goals. Graduating from college, increasing their chances of getting a well-paying job, keeping (and moving up in) said job, retiring early with enough money to live comfortably, whatever.

Of course, few consistently leave nothing to chance when taking this path. Many of life's hassles are the result of give and take, and most everyone knows what forms they encompass. Mortgages, loans, credit cards, various forms of insurance. Just about anything that's intangible which can buy you tangible goods or protection, if only for the time being. That is not to say they're intrinsically evil, but far too many people bank their future on nothing more than empty promises.

I mentioned in an earlier post that more than three-quarters of Americans live paycheck to paycheck. When you think of it, that's a scary number in today's turbulent economy. As long as the cost of living goes up while wages remain stagnant (or get cut altogether), people will resort to using money that's not even there. Sure, they can drop a service here and save a little extra there, but life is not about downsizing. It's about growth and prosperity that blossoms in time. I can certainly sympathize with individuals, couples, and families who do all they can to keep their head above water without drowning in debt. Yet, part of me wonders if all their efforts are in vain.

Allow me to explain myself.

How To Avoid Getting Into Debt. For Good.

Do you struggle to keep your finances in check?

Do you dread the sight of bills and credit card statements in the mail?

Does your bank account have only three digits? And two of which are behind a period?

If any of these apply to you, read on.