Good news: the loonie is soaring higher. Bad news: it's because the U.S. is in crisis

From the moment the United States government came into being in 1789, it was in the red. Saddled with a US$78-million debt from the revolutionary war, a fledgling Congress made it a priority to get out of hock, eventually setting limits on how much money the country could borrow. So much for that. Last week, U.S. Treasury Secretary Henry Paulson sent a stark message to modern-day legislators: on Oct. 1, America's IOUs will surpass the current debt cap of US$8.9 trillion. Unless Congress jacks up the limit yet again and piles on even more debt, the government of the world's largest economy will cease to function.

It's the kind of dire situation you would think might grab headlines, but it has raised barely a ripple. In spendthrift America, this is just par for the course. Since the Bush administration took office in 2000, America's national debt has ballooned by more than 50 per cent. Congress has already hiked its limit on how much the U.S. can borrow four times in the last five years. Meanwhile, American consumers, spurred on by low interest rates after 2001, racked up huge debt loads of their own. America's appetite for borrowed money seemed limitless.

Read Complete Story