Category Archives: National Debt

Don’t you think it’s time our government went to unit pricing?

Tuesday, August 28, 2012

This is from my political blog,

I’m not kidding. You know how the grocery stores show you how much an item costs, but then gives you the price per ounce? It’s called “unit pricing.”

Round numbers, there are approximately 312 million Americans. Our national debt is just under $16 trillion. The simple math is that, on a per capita basis, we’ve each borrowed $51,282 to fund our national debt. How many people in your family? Just the three of you? Okay, 3 times $51,282 is $153,846. That’s your family’s share of the national debt.


Subprime Country

Saturday, August 6, 2011

Well, it’s official. Despite and perhaps because of the remarkable debt limit legislation our President and Congress have just completed, Standard & Poors has lowered our credit rating, our national FICO score, from AAA to AA+. We, the United States of America, are now a subprime country.

Apparently, S&P wasn’t so much worried that we wouldn’t increase the debt ceiling as that we’d do it without taking any significant, short-term steps to reverse our long-term tendency to borrow ourselves into financial oblivion. When a lender – and that is their perspective – is evaluating a borrower, whether personal, corporate or government, one of the most important components of that evaluation is recent behavior history. Poop happens, to be sure, but has the prospective borrower shown maturity, commitment and intelligence in how it has dealt with adversity and managed its resources? Does management – whether we’re talking about a household, corporate executives or the President and Congress – seem competent? To what degree can that entity be counted upon to protect and return, with interest, money that is loaned to it?

How depressing. Don’t blame S&P. Blame the President and Congress who have certainly done everything possible to discourage confidence in their leadership. These people, the President included, are clueless and wouldn’t recognize real solutions to our national financial and other problems if they tripped over them. And they have, tripped over them, that is.

The really good news is that we (our government) can now enjoy all the advantages subprime people do. We can now pay higher interest rates to borrow money on which we can’t afford to make the payments anyway, so who cares? Our military and other branches of government can now buy weapons, bullets and other stuff at places that advertise, “No credit, no problem!” Instead of driving shinny new limos, our President and Congressional leaders can drive themselves around in older, higher mileage used cars. This is great.

I see only one real problem. Do you remember how our government squandered hundreds of billions of dollars saving commercial and investment banks whose executives were making money hand over fist by recklessly lending to subprime customers, and how we gave them all that money on the condition that they promise to never, ever do that again? And to their credit, no pun intended, they’ve tightened up their underwriting and haven’t been lending any real money to anyone since then. They’re not going to help. Europe’s up the creek. Japan’s got it’s own problems to worry about. And borrowing more from China has too many strings attached.

So who’s going to bail us out now that we’re broke?


A Committee of Our Peers

Tuesday, August 2, 2011

Why does anyone think that a “Super Committee” of 12 members of Congress, six each from both parties, is going to solve anything?

By “anything,” I’m including what to order for lunch.

Well, some ideas are just too big to keep to myself – like I ever needed a really big idea as an excuse to write. Do you know what I think? (I certainly hope not.) What I think is that the “Super Committee” should consist of 12 Americans selected more or less at random, like a jury.

I’m not kidding. 12 Americans selected at random, subject only to the following constraints, in no particular order: (1) They must be American citizens. (2) They must be registered voters – four of them Democrats, four Republicans and four Independents. (3) They must be at least 18 years old.

MOST IMPORTANTLY, (4) They cannot have ever run for office, or currently be running for office, or be employed by any office holder or candidate, by any political party, action committee, lobby, whatever. We’re all political. I get and like that about us. I just want to make sure there are no actual politicians or political activists on the committee.

There. My money tells me these 12 we pick will figure out what to do, and that it will be a well rounded solution that makes good, common sense. (Congress can then ignore their suggestions and get back to doing what it does best, whatever that is.)

Six months from now, when I’ve proved my point, the next thing I’m going to suggest is that, every two, maybe four years, we use the same criteria to select 535 people at random to be our House and Senate. …You can’t seriously think they won’t do better than the current bunch of yahoos we we’ve elected.


The Multiplier Effect

Tuesday, July 12, 2011

Why do the President and Congress always talk about programs in terms of 10 year periods? Sometimes it’s because the changes they’re trying to accomplish are so huge, so momentous they’ll actually take 10 years to accomplish. Mostly, it’s because they want to exaggerate the beneficial impact of some new program or law while spreading out the negative effects on their corporate contributors and electorate supporters. They are, in other words, cheating. Spinning like a top.

Those of you who studied economics when you were in college are probably familiar with “the multiplier effect.” It’s the way buying one thing creates demand for other things that go into making the first thing, and so on. It may take only one stubble-faced guy, wiping his hands on an apron that had to have been dirty when he bought it, to slice that shwarma and make the gyro you’ve been thinking about all morning, but think how many other people were involved in making that giant lump of who knows what meat, the pita bread, the paper plates and 34 napkins you’ll need to eat it and the chewable antacids you’ll be popping later that afternoon – and the ingredients that went into making those things too.

Raising the Debt Limit: A Reasonable Compromise

Friday, June 17, 2011

I don’t want our government to increase the debt ceiling. I want us, as a nation, to start living within the limits of our income. Even better, I want to start paying down the debt we already owe before we choke on the interest on that debt. Everybody knows we’re way over-leveraged and that it’s killing us.

That having been said, I don’t think our Congress will or can cut enough in the next few weeks before we hit the current ceiling to make an increase in that ceiling unnecessary. So what do I propose?

(Notice how we bloggers write this stuff as if anybody is really listening? It makes us feel better and, who knows, every once and a while someone with a microphone or elected office reads something and says, “You know, that’s not a bad idea.”)

I propose we increase the debt ceiling — presumably to give Congress time to effect huge cuts in spending that are long, long overdue – but only on the condition that all new debt we incur be to individual Americans.

Why Americans? Because I don’t want to borrow more from other countries – China, for example – our indebtedness to which can affect how we behave internationally.

Why individuals? Because I don’t want corporations to own any more of America, not even and especially not commercial and investment banks even though their resources may be largely derived from individual investors. These are entities that already have too much influence on government policy.

Why Americans? Because who better to earn the interest we pay?

So, am I good at this or what?

Oh, one other thing… I want these new American investors – from kids to working class and professionals, to retirees, the ordinary you and me out there who can invest one to a million dollars, whatever we can afford – to agree to defer our interest until the economy is back on its feet and we’re showing a significant budget surplus. Who else but American’s would be willing to do this for our country? What better way – other than by voting – to involve Americans in resolution of our fiscal crisis?


Misdirection: The stupidity of increasing the retirement age.

Thursday, February 17, 2011

Hi. Increasing the retirement age by a couple of years is a meaningless gesture that will have little or no sustained impact on the affordability of Social Security. It’s sort of like asking a Cheetah that hasn’t eaten a few days, at least nothing really tasty – Can you tell I’m on a diet? – to give your 90 year old grandmother an extra few seconds for her and her walker to get a head start. Dollars to donuts – Hmmm, donuts. – she’s had it.

It’s time we paid China off.

Saturday, January 22, 2011

By “we,” I mean us. Literally, you and me, as opposed to Congress which could order the pay off, or the Department of the Treasury which could just do it. More on this distinction in a moment.

You know how your relationship with a person, a friend or relative, changes when you let them do you a favor? Especially if you borrow money from that person? It does, doesn’t it. You lose leverage. You know it, and the other person knows it. It may, in fact, be why the other person offered or agreed to do you that favor in the first place, to change your public, if not private, attitude toward his or her behavior. It used to be okay for you to be openly critical of that creep in your department, until he covered your ass with your supervisor when you blew that assignment.