When governments default on debt, several negative effects are likely to follow. The reasons for the default usually stem from revenue shortfalls, and the effects can be both short and long term for government officials and taxpayers. They include higher costs to borrow money and a reduction in services for taxpayers.
Read more: http://www.ehow.com/info_7800623_happens-government-defaults-debt.html#ixzz2gV0Etikp
Doesn't sound so bad, does it? Now think about it - you want to access a program for your child. This program is funded by the government. Your child has been identified as autistic and needs this therapy that you managed to find with government funding, thereby making it more affordable for you. But guess what? Because the government is bankrupt, they are no longer funding that service. You either pay out of pocket, or you don't get that service.
Same goes for if you want to take a camping trip to a national park. You can't go see Old Faithful right now, because Old Faithful is in a National Park and you can't get into one - they're all closed. You can't go to the Grand Canyon, even if it's been your life's dream. Because the Grand Canyon is a National Park and they're closed.
What does this mean for us Canucks? Right now, not much. We won't feel the pinch of this government shutdown immediately. When will we feel it? When exported product from the US is delayed because the shutdown has affected the US based business that would export. When exported product from Canada is delayed because the shutdown has affected the US based business that would receive it.
Our economy, in light of the global financial crises is pretty strong. But it's not infalliable and it's not impenetrable. We will likely feel the pinch from this US Government shutdown if it lasts too long. The last time the US Government shut down was in 1996. And that was only for 3 weeks. If this shutdown lasts longer, the world may be in for some very tough times.
I think it's time that the world economy stopped relying on the American Dollar.
