Paul Krugman has good news for Californians and all Americans, particularly your grandchildren and those who are still just a wink in the eye of their parents. There is no debt problem after all. Sounds a bit radical but it can’t be. The president said the very same thing in a meeting with the Speaker of the House.
According to the gospel of Paul, NYT: Jan 17
“The budget deficit isn’t our biggest problem, by a long shot. Furthermore, it’s a problem that is already, to a large degree, solved.” – and – “(Similar things are happening at the state and local levels — for example, California appears to be back in budget surplus.)”
I say, give the man a handicap sticker for his car. He is as blind as a bat.
With no apologies for the lack of a segway, here is a thought from a man whose vocabulary was bigger than a dictionary, William F. Buckley. Buckley said that while the Left says it is open to other points of view, it always shocks them to discover that there are other points of view.
Has anyone noticed that the problem in Europe is with governments, not the private sector? Has anyone pointed this out? Not that I have seen. Economies are weak but not in recession, certainly not in depression. It’s nations that are in virtual bankruptcy, not industry.
Bad planning, embezzlement, inefficiency, and over spending at a corporation will put the company out of business. It creates a hardship, but only for the people who worked there and only until they find another job. The process eliminates a poorly acting member of the economy and acts as a discipline and incentive for other members of the private sector to do better. But when bad planning, corruption, inefficiency and over spending occur in a government, the government doesn’t go out of business, it increases taxes to pay for continuation of the same destructive pattern. There is very little discipline to curb over spending in a democracy because the people vote for the candidate that promises the most and delivers the most of those very things that are the cause of the insolvency.
The problem is simple, too much government spending. The solution is also simple; it’s just not palatable. Churchill said it well with his inimitable wit, “Democracy is the worst form of government,…except all others”.
Why the Debt Ceiling Fight Is So Fierce
Really now, how serious is this national debt problem?. Figures fly at us like a fleet of locusts. The onslaught of numbers comes from all directions, talk radio, think tanks, politicians and from agencies of the government itself. The size alone makes it impossible to relate.
We have been told how many freight cars it would take to hold a trillion one dollar bills and how many times a trillion dollars worth of sawbucks would go around the world laid end to end. But that doesn’t tell us anything useful; it just shows the numbers are big. We knew that. Then we read about percentages of GDP. What does that mean? How can we relate? How can we make sense of it? We do it by relating expenses and debt to income, not to freight cars or GDP. Our table relates the financial state of the nation to basic family finances.
The government numbers in the table are fixed. Except for Unfunded Liabilities which is an estimate; the figures are reported facts. The family side is a “what-if” table. It answers the question — if a family had an income of 80,000 dollars with spending and debt in the same ratio to family income as the government ratios, where would the family be?
The answer is nearly unimaginable. Such a family would have a half million dollars in outstanding debt, over 600,000 dollars in additional future commitments, no savings and still spending nearly 60% more than they earn. Is it any wonder the rating agencies are prepping us for a downgrade? Is it any wonder why there is a stalemate in Congress when some members, with the backing of the president, actually want to increase federal spending and debt while others insist on cutting both before it’s too late?
If your income is half the 80,000, cut the rest of the numbers on the family side in half. If your income is double, double them. If you have a blog please feel free to take the table and use it as you wish. The more distribution it gets, the better.
Click the table to enlarge it.
From Power Line
Blagojevich will be the fourth former governor of Illinois to go to jail since 1973. It is quite remarkable that President Obama has been able to avoid any significant association with the political culture from which he emerged.
About Michelle Bachmann
No, she is not a flake. She is, however, a gaffe a minute. The MSM would love to see her become the Republican candidate. I am concerned that she could suddenly blow it they way Howard Dean did. Pawlenty polls far below Bachman nationally but well ahead of her in Minnesota where they are both very well known.
Gross Domestic Product (GDP) is a measure of the size of a national economy. Comparing a nation’s level of debt to the size of their economy is a measure of prudence
in the level of borrowing. It is also a measure of their ability to make good on their loans.
We all know that Greece is deep in a pile of organic fertilizer; but few seem to realize the United States is headed even deeper. Here are some samples of debt as a percentage of GDP according to the IMF. Portugal 83, Ireland 94, Iceland 116, Greece 143. Germany and France are 74 and 82 respectively. The Congressional Budget Office currently puts the United States at 93 percent and projects it to be 140% in 1928 and 190% by 1935. And you know no one is going to bail us out.
It is no winder the Democrats have not met their obligation to present a budget for 2 ½ years. It would mean they would be held responsible following in the footsteps of Greece.
Dear U.S. Taxpayer:
Please send $117,978. This is your share of the National Debt and we want to pay it off to improve our credit rating. Please hurry because interest is piling up while you wait. In fact if you could send $180,163 it would cover both the debt and interest. That would be appreciated.
Kindly use Fedex. It is so much quicker than U.S. Mail.
Your humble servant,
The U.S. Government
Check out the source at this link. It is dazzling.