Think ... People, THINK!
Everything you wanted to know and didn't want
to know about the national economy has been said and written about.
- More and more of "American" industries are becoming foreign-owned
* 75% of motion picture and sound recording
* 65% of metal ore mining
* 51% of plastic products
* etc etc etc
- In 2006 44% of the U.S. debt was owned by foreign companies. Not much more and they could dictate our foreign policy or completely destabilize our economy.
- In 2008 our trade deficit was a record $690 billion.
- The national debt has risen every year, through all administrations, since 1957 at which time it was a "mere" $0.27 trillion.
- The total public debt outstanding in December 2010 was $14 trillion.
- The 2010 budget deficit was $1.3 trillion (the 403 billionaires in the U.S. have a collective net worth of $1.3 trillion).
- Estimates are the 2011 deficit will actually be $1.6 trillion. As Everett Dirksen is misquoted as saying ... A billion here, a billion there, and pretty soon you’re talking real money.
- The cost of the wars in Afghanistan and Iraq in the past decade is $1.1 trillion.
- The 2011 budget request for "overseas contingency operations" is $159 billion.
- The 2011 budget request for non-military foreign aid is $56.8 billion.
- The price of a loaf of bread was $0.50 in 1960; 50 years later (2010) it was listed as $2.49.
I think there is some parallelism with the Fall of the Roman Empire. One of the theories concerning that fall is that the rapid growth of the empire over a relatively short time (several hundred years) and the economic inflation that followed contributed substantially to the empire's decay. Due to the size of the empire, it required an enormous budget to maintain the infrastructure and huge sums were required to keep up its armies. To cope with both problems, the empire was forced to raise taxes frequently, and also to adulterate its coins, causing nominal inflation to skyrocket into hyperinflation. This in turn caused major economic stresses that some historians regard as central in Rome's decline.
I think we are in deep yogurt. If we are to have economic survival at all, our great-great-grandchildren will have to find a way out of our public debt, foreign debt holding, trade deficit, loss of resources, inflation, et cetera. Can we help them now? If the greatest financial minds and our government can't help (and in fact keep exacerbating the dour economic situation), what are you and I to do? I think we first need to take financial care of ourselves.
What do you think?
The emphasis here is on individual common sense thinking about personal finances. An important distinction is "needs" versus "wants". The distinction is not always clear. At the physical survival level, healthy food, shelter, basic clothing, medicines are critical parts of our financial allocations. But an occasional "splurge" on a sweet roll or new gloves may be equally important for a specific individual for mental health ... for getting some enjoyment out of life. At the working level, we are faced with decisions almost daily. Do we buy more expensive but perhaps healthier organic lettuce, or do we save a few pennies and buy "regular" lettuce. At the affluent level, financial need doesn't exist and allocations for food, shelter, clothing and medical may only be a minor mathematical exercise. At the super-rich level the problem may be -- what to do with surplus? Help humanity (e.g. Gates and Buffett Foundations) or help the Government?
I think "the common man" needs to assure as much as possible the financial health of self and family and work to elect to office representatives who are knowledgeable about economics and finances (as well as being honest). I think our revised Constitution needs to directly address the factors that got us into this and previous economic crisis.
What do you think?
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