Spidy

problem is that the U.S has to borrow the money to replinish the reserves and I just can't wait to see how this downgrade effects interest rates.

Got this in an e-mail..Puts things in perspective.

The U.S. Congress sets a federal budget every year in the trillions of dollars. Few people know how much money that is so we created a breakdown of federal spending in simple terms. Let’s put the 2011 federal budget into perspective:

U.S. income: $2,170,000,000,000

New debt: $ 1,650,000,000,000

Federal budget: $3,820,000,000,000

National debt: $14,271,000,000,000

Budget cut: $ 2, 100,000,000,000 ( CBO estimated )/ Annualized over 10 years (210,000,000,000)

It helps to think about these numbers in terms that we can relate to. Let’s remove eight zeros from these numbers and pretend this is the household budget for the fictitious Smith family

Total annual income for the Smith family: $21,700

Amount of money the Smith family spent: $38,200

Amount of new debt added to the credit card: $16,500

Outstanding balance on the credit card: $142,710

Amount cut from the budget: $210

So in effect last month Congress, or in this example the SMITH family, sat down at the kitchen table and agreed to cut $210 from its annual budget. What family would cut $210 of spending in order to solve $16,500 in deficit spending?

It is a start, although hardly a solution.

By the way, the slightest interest rate increase (just a quarter of one percent) will wipe out this budget cut savings.