Thursday, December 23, 2004

"Like A Kid With A Credit Card "

From "The Cranky Liberal Pages" (
Author Chooses to Remain Anonymous

Ever see a college kid get his first credit card? You know the one
that is to be used in case of emergencies? I have to - I was one of
those kids. I still have the stereo I went out and bought with it
(emergency). I no longer have the beer (bigger emergency) , and
thankfully no longer have the bad mark against my credit (REAL
emergency) thank you very much. I learned lessons about income and
debt the hard way. It doesn't seem like the current inhabitor of the
White House ever had such a lesson.

In broad schematic terms, the United States imports and the rest of
the world exports; the United States borrows and the rest of the world
lends. Financial flows are so lopsided that last year America soaked
up nearly three-fourths of the surplus savings in the entire world.
Not surprisingly, this state of affairs is adding to the country's
foreign debt.At the end of last year, the nation's financial deficit -
what the United States owes the rest of the world, minus what the rest
of the world owes the United States - amounted to more than $3
trillion, about 30 percent of the country's annual economic output.
And it is growing. In the 12 months through October, foreigners
acquired nearly $885 billion of new United States government and
corporate debt.

Three Trillion dollars? 885 Billion on new government and corporate
debt? Corporate debt I can forgive to a point, because investing in
U.S. companies raises capitol for those firms to grow, prosper (well
and offshore jobs, but that's another post) and keep the economy
going. The skyrocketing government debt though is seriously troubling.
We are now the worlds largest debtor nation, a country that runs on
the whims of foreign investors. During the election, Dubya lambasted
John Kerry for saying "global test" when it came to security. GW said
he would never put America's security in the hands of the world, but
isn't that what browning ever growing sums of money is doing? What
happens when those countries decide we are a bad credit risk? What
happens when the money dries up?
When you owe money, large sums of money, you don't call the shots. You
don't set the agenda. Money is power and unless we work very hard to
straighten our finances, we are going to learn this lesson the hard
way--just like a college kid with an overdue credit card bill!

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