Hey friends..

Presently we can see us grappling with debt crisis...

When Bill Clinton left the white house the American govt had surplus..n so had the title of super power..but after that when George bush came into power the expenses were like

1.Medicine -$180 bn

2.TARP -$224 bn

3.Discretionary -$608 bn

4.Stimulus -$773 bn

5. Defense-$1469 bn

6.Tax cuts -$1612 bn

and the projected spending of Barrack Obama includes

1.Medicine -$152 bn

2.Discretionary -$278 bn

3.Stimulus Tax cuts -$425 bn

4.Stimulus Spending -$711 bn

What Does Default Mean?

In simplest words i would say the failure to promptly pay interest or principal when due..

What is Debt Ceiling ?

The legal limit on borrowing by the federal government.The United States Constitution gives the Congress the sole power to borrow money on the credit of the United States.Before 1917, Congress had to approve borrowing each time it came up. In order to allow for more flexibility as the nation entered World War I, lawmakers agreed to give the federal government blanket

approval for most types of borrowing — as long as the total was less than an established limit.

problems affecting now.The nation’s debt is nearly closer to the legal limit of $14.3 trillion.

In the near time if this will be breached then I think effects will be worst which includes:-

1.The new debt deal formed by Barrack Obama raises the debt ceiling by $900 billion to $17.7 trillion.

2.It cuts spending by $917 billion over the next decade and a special congressional committee will be assigned to find another $1.5 trillion in deficit savings by late November.

3.If Congress comes up with the savings, or passes a balanced-budget amendment to the constitution, the government will accrue another $1.5 trillion boost the debt ceiling - sufficient to pay the country's bills through 2013.

4.If Congress fails, the president will be granted a $1.2 trillion debt-ceiling extension - but automatic, government-wide spending cuts (half of which will come from the defense budget) will take effect in 2013. There will be no automatic tax increases.

But this debt crisis is the best thing that has happened in a very long time!

Why?

Because it woke up the world, especially Americans. We gazed in astonishment as the blind idiosyncrasy of the USA,unfolded. The truth spilled out, covering the loopholes of the government along with that USA is threatened to lose its AAA rating...basically world's super power rating essence on Indian Economy primarily US debt crisis unlikely to impact Indian economy but as far as I see the domestic economy is not insulated from the world economy, there will definitely be some tremors here in India. Both imports and exports will be impacted. India’s exports to the US, particularly IT services, will have an adverse impact.

Any slowdown in the US will have an impact on India in terms of our ability to export..as during 2008-09 there was a sharp decline in Indian exports..but at the same time we can see appreciation of the rupee, which in turn will help bring down the current account deficit...

But still we can see downfall of economy as well as politics tooo...

so hope for the best and next time when the share markets falls there is an amazing opportunity to buy and make profits...

good luck...take care...:)