An interesting post on the fiscal situation in the US.

An observation from the post … “Governments are not assessed the same way as private firms because they have taxation authority, monetary sovereignty, and control over legal tender in ways companies do not.”

So we need to stop measuring government spending as if it were a business or a household (businesses and households are currency users, not creators).

This does not mean that problems don’t exist in the US … the fact is that “… a government with rising debt, very large long-term commitments, trillion-dollar annual interest costs, and a fiscal path that its own institutions say is unsustainable if policy does not change”.

And the impact will be felt both in Canada as “Canadian rates, Canadian exports, Canadian financial conditions, and Canadian policy choices all sit downstream of what happens in U.S. markets”, but will also be felt to a greater extent by the world at large.