Sunday, December 20, 2009

A good day to live up north...

For the first time in recorded history is actually paid to live north of Westchester as we dodged that big winter storm. Unfortunately, this is going to make analyzing retail sales for the Christmas season because every retailer with a location within 50 miles of the East Coast is going to blame this storm for any perceived weakness in their holiday sales.

I find the sudden religion that so many have found with regard to our nation's debt load to be more than a little disingenuous. It's correct to be concerned about our crushing debt but this debt has been building for 30 years so to act like it has been caused by the runaway spending of a President/Congress that have been running the show for 11 months is either ignorant or deceitful (or both).

Having said that there are some interesting stats in this Forbes article...

"What is a "trillion?" If you laid 1 dollar bills end to end, you could make a chain that stretches from Earth to the moon and back again 200 times before you ran out of dollar bills!"

Our colleague Rob Arnott, who always does terrific research, wrote in his recent report that "at all levels, federal, state, local and GSEs, the total public debt is now at 141% of GDP. That puts the United States in some elite company--only Japan, Lebanon and Zimbabwe are higher. That's only the start. Add household debt (highest in the world at 99% of GDP) and corporate debt (highest in the world at 317% of GDP, not even counting off-balance-sheet swaps and derivatives) and our total debt is 557% of GDP.

Less than three years ago our total indebtedness crossed 500% of GDP for the first time."

Add the unfunded portion of entitlement programs and we're at 840% of GDP."

This isn't entirely accurate because it includes some double counting, but they are startling numbers. However, like the person that wakes up 50 lbs overweight it didn't happen because you ate an extra bowl of ice cream last night, it took years to build up this debt situation.

I've been a little obsessed with cool space videos on youtube lately. This video from the Museum of Natural History is really, really cool. It takes a little while to get going, but it's a worthwhile waste of time.


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