Concepts
Not too long ago I was hanging out with a group of guys, and one of them was depicting how the internet works. Basically describing that if you, for instance, live in Atlanta and are trying to connect to a website whose servers are in Canada, he was explaining the logic behind the fastest/most efficient way to connect. This was way over my head. He understood something I had no clue about.
So, you probably figure I am making a point – haha. Well, as the guy was talking he made the comment (not to me specifically), “Dude, Microsoft is huge. They have trillions of dollars worth of assets to help their connections.” At that moment I realized that in less than a year, the concept of a trillion had been stuffed into a box and now could be used to describe anything.
Try this on for size. A million seconds is 12 days, a billion seconds is 31 years, but a trillion seconds is 31,688 years. 31,688 YEARS. That is PRE-HISTORY. If you spent a $1,000,000 every day, you would have to spend it every day for 2,740 years to get to a trillion!!
Now back to what that guy was saying about Microsoft. Their market cap (assets) is $218 billion. Most fortune 500 companies hover around that figure, and even THAT figure is more than the GDP of some countries! Correct, some companies make more than some countries do in a year – and that’s a quarter of ONE trillion. A quarter. Are you seeing how big this is?
So, the U.S. national debt is over $11 trillion, or over $36,000 per person (given U.S. population is 300 million). Bush increased our debt by $1 trillion (over 8 years). Obama is going to double that and MORE. That means YOU (and me, of course) are responsible to pay this off – as long as we are U.S. citizens. Of course, not everyone pays taxes, so more burden is shoved on you (and me). Do you understand? The government represents US – WE ARE the government – and WE have to pay this debt back. Am I concerned when inflation rises, or spending increases, or when the dollar devalues? You bet. Are you? Because “the government” is no some far-off, semi-imaginary thing that gives you a tax refund every year. The government is real and they get their money from us; that’s why we have to pay taxes. Let’s make it simple: if someone has a credit card with a balance, that person pays off that balance from the income they receive. We are the government’s income, and they have a balance on their “credit card”.
It doesn’t matter what your political views are. In my opinion, we should all be very concerned with how the government spends our money. In fact, I think that is something we should all agree on.
Ever wonder if we are making progress with the mortgages?
Time for a mortgage crisis update! *lightning flashes and thunder rolls*
Sounds like what I mentioned about consumer confidence (CPI), unemployment, the uptick in construction, and the double dip recession camp I’m currently in is being proven. This article mentions that since government aid is set to run out soon for people purchasing homes, and, therefore, will cause the already high foreclosure rate to increase. So, since the dollar is now backed by toxic assets and the government is cracking down on credit card companies, get ready for another dip in the stock market and for a “frost” to set in on credit.
Progress
This year, for the first time in a long time, U.S. citizens, on average, began saving the money they earned at a positive rate. References:
- http://freefrombroke.com/2009/01/savings-rate-finally-turning-upward.html
- http://online.wsj.com/article/SB123120525879656021.html
Why are the citizens of the U.S. saving their money so vigorously? Why is their government spending their citizens’ money so vigorously? It seems they have differences in how to solve our collective “problems”. As Peter Schiff said, “But rather than accepting the market’s medicine, our government is overriding its own citizens’ responsible behavior. To do so, it has put borrowed money into consumers’ pockets, and then conjured various incentives for them to go out and spend it. This process requires more government bureaucracy, more debt, and more regulation at a time when we can’t afford any of it.”
In my opinion, citizens are setting the example for how the government needs to be behaving. It seems the government’s solution is doing the opposite of what I think a good solution is: save money. OK, government, your citizens have started acting more responsible with their money. Your turn.
Peter Blane 