Campaign Financial Terms

   It is less than a week to the Presidential campaign debates, are you excited? Whether your answer is yes or no, one thing is definite, certain topics will not be properly discussed. Number one on that list is the financial situation of the United States.

   Pundits and journalists attempt to use many different metrics to justify their opinion of the economy, this is sad, if not criminal. Very few are taking a sober approach towards the situation. Here is a break down of a few "thoughts" by the political class.

1. "The Dow Jones is doing well." So what? The Dow Jones is as antiquated as ticker tape. It's literally 30 different "blue chip" stocks weighted to give a rough idea of how the market is doing. It was founded May 26, 1896. The whole reason it was created was because 106 years ago they had no means of tracking all trades, today they can, and they probably do somewhere and just don't tell anybody. Furthermore, what that means is 30 companies are doing well.... Which is nice but not enough. Mark Cuban wrote a great blog about what the stock market is currently compared to historically. Most importantly he highlights that it is no longer a mechanism to raise cash for companies, and that it is now a mechanism for traders, or as he calls them hackers, to exploit the system. 
2. "Unemployment claims are down." That's great, what about all of the people that are not working? This is such a shady set up. The Bureau of Labor Statistics uses 6 different measures of unemployment. On top of that, they adjust it seasonally, which means that politicians can  convienently tout the numbers they like. The U.S. has over 311,000,000 people, why isn't there a simple total number of people at the end of every month? Hey BLS, here is an idea: Each month list the total amount of working age employed and unemployed people. It's pretty simple. X amount this month are eligible for the work force, and Y amount got a job. As an added bonus, they should include how many people are federal employees and how many are state employees, then say how many per state.
3. "The QE3 is helping." This is just an unadulterated lie. Quantitative Easing is simple the Federal Reserve CREATING more money supply. When more money supply is created, the value of the dollar decreases. So you can thank the fed for devaluing all the greenbacks you have been working to earn and save. 
4. "The deficit... The debt." Nobody has taken the time to draw the line of distinction here. Everybody talks about it like they know something, but they seem oblivious to the function. The DEFICIT is the annual amount of spending that the United States has to borrow money to accomplish. Hold on, here come the numbers. In 2011 the federal government expected tax revenues of $2,567,000,000,000, the actual receipts were $2,314,000,000. They have cute phrases, instead of expected and actual, they use "Requested" and "Enacted." It only makes perfect sense that they in turn spent $3,880,000,000,000 ($25,000,000,000 of this was debt payment). That gives a ONE YEAR total of $1,566,000,000,000 that the U.S. had to borrow to cover spending. ONE YEAR! Hmm.... 2.314 divided by 3.88 equals .5964... Wait, the U.S had to borrow FORTY PERCENT of the money it spent? For 2012 the DEFICIT is estimated to be $1,327,000,000,000. As with most government operations, it is likely that it will be and even larger sum. Wow, that is a lot of DEBT. No, NO it's NOT. The current United States Of America's DEBT is OVER $16,000,000,000,000. DEBT is the aggregate of annual DEFICITS. The DEBT of the United States is almost SEVEN times that of it's annual "income" and growing at a rate of over 60% of "income" annually. This would be like a person earning $100,000 a year being in debt to the tune of $700,000 and adding $67,000 to it annually. This is horrible. For that person they would have to cut that $67,000 (FORTY PERCENT) of spending just to stop the DEFICIT BLEEDING and break even. To make any real difference in the DEBT, they would have to cut FORTY-FIVE percent or more. If the U.S. cuts just FORTY PERCENT PLUS $100,000,000,000 - that is  ONE HUNDRED BILLION DOLLARS - or a total cut of $1,427,000,000,000 of spending in 2013, and continues to spend $100,000,000,000 LESS than it takes in annually, by 2023 it would still be $15,000,000,000,000 in DEBT. If they maintained that rate, the United States of America would be out of debt by 2173. The morbid reality is that the $100,000,000,000 ANNUALLY  would be hard enough to cut on it's own, and the $1,000,000,000,000 PLUS ANNUALLY being borrowed is impossible in the current political climate. 

   Right now, the dialog about the U.S. financial position is as humiliating as the situation itself.  The degree of reality and sincerity with which it is being discussed is borderline sociopathic. Until a majority of people start demanding real fiscal responsibility, and grasp the reality that many people, if not all, are going to lose some level of entitlement, the situation will only get worse. If this rate continues, in 7 years or less, it will no longer be about helping the less fortunate, because there really will be a 99% percent, and they will all be less fortunate. 

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