Here is a joke
A man devotes ten years of his life
in an effort to counterfeit the perfect $9 bill.
Having finally succeeded,
he takes his first product to a local candy store and asks.
“Do you have change for a $9 bill?”
To which the man behind the counter replies,
“Certainly sir. Would you like three threes or two fours and a one?”
Here is a second joke:
A noted Congressman speech to his constituents:
“If you ran your family or business budget
the way your government runs theirs,
you would be bankrupt.”
To which the we can all reply
“Certainly sir, would you like three threes or two fours and a one.”
The truth is somewhat different than the Congressman’s speech to his constituents:
The U.S.Government is not going broke. Far from it. In fact, if the United States Government were a business, it would be the single most successful corporation of all times. With assets 100 times greater than liabilities, it would also be the most solvent operation of all times. The United States Government is the largest property owner in the wealthiest country on the planet earth. It owns not just land, but also mineral rights, grazing rights, lumber rights, not to mention an unbelievably wide variety of income producing operations from the post office to customs and excise. 14 trillion dollars in liabilities is nothing compared to assets measured in quadrillions.
The problem is not net worth, it is a problem of accounting. By law the U.S. government has no assets. All that property, the mineral rights, grazing rights, lumber rights not to mention the income producing operations is listed on the books as $0.
We are all of us lucky that we do not have to run our households and businesses the way the government is forced to operate. If you ran your home or business the way U.S. government runs its business, you would become automatically insolvent the moment you took out a mortgage to buy a house, a loan to invest in your business, or even made a substantial purchase using your your credit card because everything you bought would have $0 listed value. You would have debts but no assets.
This is why the United States has been in debt since day one of the Republic. In 1791 the U.S. government owed 75 million dollars, and let me tell you that in 1791 seventy five million dollars was a great deal of money. For 240 years this unusual accounting system has existed with no problems. The U.S. Government has been simply been rolling over its debt. Now we are being told, because of this debt, the entire country is about to go broke, flushed down the toilet.
Who are these people, and why are they pulling our chains?
More to the point, why do we fall for this garbage? Why do we take the word of bunch of scam artists, whose only ability seems to be the talent to con the rest of us?
This is simply one more round in the seemingly never ending fight between the con men and the schmendrichs and once again you and I have been nominated to be the schmendrichs.
The truth is, The United States cannot default on its foreign debt because alone of all the countries in the world, the United States has no foreign debt. All U.S. debt is denominated in U.S. dollars and (with the possible exception of North Korea), the United States Government is the only Government that prints U.S. dollars. Of course, if the U.S. Congress decides that it will arbitrarily stop payments . . .
But no! That is not possible! In the end, I am sure (or at least hope) that the government will stop short of suicide.
Of course whatever happens you and I will all have to pay the price for Congress’ latest game of chicken.
Ø Interest rates on U.S. government bonds will rise fractionally, costing about one-trillion dollars over the next ten years
Ø The possibility of the country sinking back into recession will rise
Ø Unemployment will almost certainly move above 10%
And, here comes the punchline: All of this is being done in the name of financial probity. You go figure it out.
All things considered it is indeed fortunate that the United States is so wealthy. Otherwise, we would never be able to afford our government.