“He gave us a phone, he gon do more!”

Saw this lovely video posted on Drudge today and felt the need to share:

If that isn’t alarming in a society that now has over $16 trillion in debt (over $6 trillion accrued in the last four years alone), then I don’t know what is.  It is certainly anecdotal, but also suggestive.  One quote that was featured in the YouTube user comments was quite appropriate (though its attribution to Alexis de Tocqueville was probably incorrect):

“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy….”

We are out of control.

 

Moving Gradually to a National Debt Solution

As I’ve noted in other posts, the national debt may be a very troubling issue but we do have time to address it.  I’ve also noted that shocks to government spending or taxes are a risk to do significant damage to the economy.  That led me to the question: at what constant rates could we change the major variables and still avoid the debt reckoning that appears to be on the horizon. Continue reading

Stimulus, the Anti-Stimulus, and Getting Out of this Mess

The concept of government stimulus is generally assumed to be a purely Keynesian concept, but I don’t know that other legitimate schools of economics would deny that a sudden increase in government spending would have an impact on the economy under ideal conditions.  The problem is that those ideal conditions seldom occur.  I think it’s pretty safe at this point to say that the previous US stimulus plan didn’t work in the manner that was anticipated, and I would argue that the consequences of this tremendous, poorly-executed spending increase do not justify the results, but that doesn’t mean that nothing happens.  What I’d like to consider for now, though, is what the opposite of a stimulus is. Continue reading

The US Debt Relative to Greece

As my father used to say “There are three reasons we can’t do it.  First, we don’t have the money, and it doesn’t make a damn about the other two.” – T. Boone Pickens

So what would it take for the United States to get to levels of debt like Greece?  It turns out, not that much.  In fact, it could be happening very soon.  Most people in the US have been closing our eyes and hoping that if we can’t see the problem it doesn’t exist. Continue reading

The Basics of Government Debt

Some debts are fun when you are acquiring them, but none are fun when you set about retiring them. – Ogden Nash

The next few posts will be about the debt crisis in Greece, other European nations, and the United States.  The first one will be light on the numbers, but the groundwork must be laid for any of those numbers to make sense.  Without understanding the basic mechanics of government debt, no data could help to create an informed decision. Continue reading