What I’ve Been Thinking: The Economy

I spent a good chunk of my time this past year trying to get a handle on just what, exactly, had happened to the world economy, and how it had happened. I am absolutely not an economist, so most of what I heard made little sense. However, the parts that I did understand either made me furious, sad or scared. Seems that all of the “fixes” which have helped the economy “recover” are just band-aids, and have not fixed the fundamental problem, which is that, on the personal, local, national and global level, we are spending more money than actually exists, and the only way to prevent this whole edifice from collapsing is to continually spend more money. I realize this is an incredibly over-simplified view of the issue, but nothing which I have read has in any way contradicted it.

Two websites have been quite helpful in my research: Barry Ritholz’ The Big Picture and Naked Capitalism. Each publishes several articles a day, and do a good job of digging through the corporate/political smokescreens to get at the actual numbers.

Round about election time, I came across an online Federal budget simulator which allows users to sort out the Federal budget, with an eye toward “Stabilizing the U.S. Debt at 60% of GDP by 2018″. In other words, keep the debt from eating us. I ran through it a few times, and let me tell ya, it isn’t easy. In fact, it is impossible without making changes, increases, and cuts which would leave everyone’s oxen pretty well gored. The plus side is that the industries which lobby the hardest to get laws changed in their favor would be the hardest hit. I will post my solution in a future update. I will tell you that, among other things, I would not be eligible for social security until I was around 70, which is fine with me.

If I were the benevolent overlord of the world, one of my first commandments would be “Thou shall not make a profit in a manner which damages the system which allowed you to make that profit”.

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