November 23, 2011
I was catching up on reading blogs earlier today and found this one from Ryan over at Total Survivalist Libertarian Rant. It’s a simple picture that shows how just how bad the US Economy is by comparing it to a household budget.
It’s hard to argue with it.
What do you think? Can we recover? Could a family in the situation depicted recover? Looks grim to me.
Joe
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November 23, 2011 at 3:28 pm
The problem is not the size of the debt, the problem is how to make money and generate revenue so that the debt is an increasingly smaller portion of the economy. If we can’t sell product and make a profit, no amount of cutting expenses will help. As THE superpower, we face the same problem faced by Spain, Holland, France and Britain when they were THE superpower, at that is, we don’t want to sell our latest technology for fear that it gets into the hands of unfriendlys or people who actively hate us.
Our two greatest achievements are the aerospace industry and the space industry. We are still the most advance nation when it come to aerospace, and we make a lot of money with that industry, but at some point, other nations will catch us ( I’m deliberately leaving out the EU). Those nations are likely to be Brazil and China, but it will be a long time before the profit that we make in the aerospace industry become insignificant.
The real problem is the space industry. Consider this; instead of mothballing the space shuttle program, we could have ramped up production and sold space shuttles. How many could we have sold? My estimate is 200. Some will snort with laughter at this point, and say that most nations have no capability, and never will, of launching a space shuttle. They are correct, and this would have been where most of our money would have been made, and that is on launch services. National prestige alone would have forced most nations to purchase a shuttle either alone or in combination with other nations. Indonesia would have been hard pressed not to purchase a shuttle if Australia had one.
The reason that we did not do so is because of the lack of national vision. Our leaders focused on the threat that this technology in the wrong hands would have posed, and ignored that this technology will be available sooner or later, it’s only a matter of time. The way for a superpower to stay secure is to constantly search out and develop new tech. When a superpower gives in to fear and keeps tech secret instead of developing and selling it, the results are inevitable.
November 28, 2011 at 6:29 am
Hi Stan –
As you’ve alluded, Budgeting 101 would say that when faced with such a deficit, you’ve either got to decrease spending or increase revenue. Those are the only two options.
For a family of four or a nation of nearly 400 million, it’s the same – fiscal belt tightening or adding more income.
Interesting solution you’ve proposed for increasing our nation’s income.
Thanks,
Joe
November 24, 2011 at 11:25 am
It’s strangely laughable when you look at our nation’s money problems like that. Obviously no sensible family could (or would) continue to live like that.
November 28, 2011 at 6:30 am
Hi millenniumfly –
Yes, no one in their right mind would lend money to a family in such dire financial shape. Yet, our government keeps the borrowing tab open.
Of course. Families don’t have the luxury of being able to print their own money either.
Joe