Politicians create catchy names and phrase footage to undermine financial concepts they dislike.
Jesse Jackson disliked “Reaganomics.” Ross Perot described the relocation of jobs to Mexico as “the enormous sucking sound.”
America’s insane spending insurance policies of each main political events have been renamed by me as “Newmanomics” in honor of “Mad Journal” means too cool cowl man Alfred E. Newman.
His mantra: “what, me fear?”
Not solely do many American individuals, corporations, and authorities officers spend like drunken sailors, some blame “foreigners” for our plight.
Having some alcoholic relations, I perceive how denial works. Denial is just self-deception.
Cannot we blame China? In spite of everything, they devour 382 million tons of grain in comparison with 278 million tons in America yearly. China makes use of twice as a lot metal as we do. China makes use of 800 million tons of coal to our 574 million tons yearly. China oil imports are up 34%.
Since China has 1.three billion individuals, and we have now about 300 million, China consumes much less on a per individual foundation than us. Furthermore, China is quickly reworking itself into a contemporary superpower. We will not blame China for our woes.
Our downside just isn’t China, India, Japan, South Korea or any Asian bogeyman.
As Pogo says, “we have now met the enemy, and he’s us.” The USA just isn’t a sufferer of something or anybody exterior.
We have purchased Washington’s “Newmanomics” bunk hook, line and sinker.
Due to this fact, “what, me fear?” is our vote-producing, bipartisan, nonsensical consensus financial philosophy.
You see, as disciples of “Newmanomics,” we are able to all the time print extra money, promote extra debt to Asian nations and…banks, improve taxes on the “wealthy” (anybody making a greenback a yr greater than we do), and provides tax breaks to industries contributing to final yr’s elections.
Extreme debt-public and private–is weakening the US Greenback and the American economy.
US Authorities debt stands at $ 8.00 trillion, which will increase a mere $1.76 billion day by day. That works out to $26,222 of federal authorities debt per American man, lady and little one.
At the least $2.zero trillion of our U.S. authorities debt is held by individuals and establishments in different nations.
If they start to understand the US Greenback as weakened, they will refuse of purchase extra US debt devices and/or demand larger charges of return, probably setting off a spiral of inflation right here at dwelling.
American company debt elevated by $1.zero trillion within the final 5 years to $5.2 trillion.
$453 billion of Ford and Basic Motors company bonds (a type of debt)have been downgraded as “junk bonds.” Their worth is prone to erode speedily and sink like a heavy rock.
This $453 billion is 15 instances greater than the bonds concerned within the WorldCom meltdown.
Private family debt averages $101,445 per American household.
Lastly, these money owed don’t embody these of states and municipalities, underfunded non-public pensions, authorities pensions, and completely unquantified, underfunded, virtually everlasting liabilities of Social Safety and Medicare.
Individuals have all the time risen to the problem and located new methods to earn more money as circumstances change and new alternatives come up.