Ah, what a great thing about the Wired Age, the idea that when things are going whompy,
Remember this little 'tard? Man, f'get Q'bert!
we can always just hit reboot and save ourselves a lot of hassle.
I die. I get reborn. I die again. I get reborn again. And so do my friends. And so do my enemies. And all we do is fight. But sometimes I win. And that makes it good to be in Valhalla.
So let’s do that with the economy. All this talk about debt and taxes and spending blah-blah-blah.
Oh, my Word. Look at how the poor fellow has aged!
Here’s where we stand right now.
Total National Debt = $14.5T’dollars. T’dollars are a trillion dollars which equals a million million dollars. The galaxy has around 300 billion stars, give or take a 100 billion.
The federal debt alone debt grows by about $2,000.00 per second. My truck gets about 18 miles per gallon. It’s a 2002 and needs a tune up. Right now, average vehicle fuel costs is $4.243. So every second, the federal debt grows by an amount that would let me buy enough gas to travel 8300 miles, enough to almost circumnavigate the contiguous United States.
Now, I don’t know if I trust this site. It’s arranged like one of those jargon heavy religious sites. Weird capitalization rules. Weird colors. Weird layout of text. Just plain odd, I tell ya. But the basic idea is sound and for now I’ll just go with the data. If that guy’s wrong wrong about the exact numbers, sorry. UPDATE: have confirmed date from various other sources. So the data there is accurate, imho.
The Debt of the U.S. is a lot larger than we think. What is the total debt of the United States? The number bandied about by the commentators is $14 Trillion. How much do we owe as a nation, as businesses, as individuals, for anything – mortgages, credit cards, student loans – anything? According to the site above, $57 TRILLION DOLLARS! Gah!
Here’s a graph of what out debt looks like from 1946-2010.
Do you know how many dollars actually exist? Only $1.9 trillion dollars in hard currency and in checking accounts. Cash only? Around $829 billion dollar. That’s only 1/68th the total debt of the U.S.
There quite literally aren’t nearly enough dollars in existence to pay for more than a smidgen of the debt.
Now total American wealth [the value of assets minus liabilities] puts us around$55 T’dollars in the black. We can call this our Total National Equity. But our Total National Debt is larger than our Total National Equity. So we’re upside down.
Now, the accumulative growth of Debt will soon out pace the wealth generation of Assets.
The interest on a savings account averages around 1%. On a checking account, it’s even less. Even a 10 year Certificate of Deposit has an interest rate of only 3%. Incredibly, a 30-year t-bill has just over a 4% yield. The average return on a stock market investment is around 17%.
But nationally, credit cards have an average APR of almost 15%. And God help you if you use a cash advance or payday loan where APR can be as high as 1,000%!
As a nation, our debts may soon swamp the Grand Ship of Capital. Better start a bucket brigade. ’cause if that ship sinks, this is what they’ll find of us.
So what do we do?
Kind of looks like flipping a bird, 'ey?
Not a hard reboot like a war or natural disaster might create, but a soft reboot. Anticipated as much as possible.
Obviously an economy like ours can’t be rebooted all at once. It will take some time.
But let us a have a bit of a thought experiment.
The Government declares that on January 1, 2012, it will begin tabulating the exact amount of debt held by all Americans up to January 1, 2012 and begins the process of collecting date so that it can honor and guarantee all debt, in any legal form, up to that point. After January 1, 2012, debt will still be allowed, but the government will only honor government debt – local, state, and federal after that date. Twelve months later, with data in hand, the government announces that it will begin printing enough money to pay off the total debt which it will release in once massive payoff.
Simultaneously, the government freezes all prices, wages, hiring, and lay-offs and announces new black market laws to prevent inflation from striking early.
So, all of America’s debts will be paid off in one big go with a bit extra to cover any unexpected debts. People may continue to lend and borrow at interest after January 1, 2012, but commercial and personal debts after that date are not secured. Government debt would continue to be repaid at 1:1 throughout the countdown to reboot. The status quo continues for two years.
Then, after two years of preparation, on January 1, 2014, the U.S. releases around $60 trillion dollars into the world economy. Now, we wait for hyperinflation to hit. We knew it was coming, so we had price and wage freezes and rational people have been buying supplies to ride out the hyperinflation.
Soon after the hyperinflation begins, though, the government announces that after so long of letting the dollar spiral into worthlessness, we’ll introduce a new currency. But we won’t say when that’ll happen. Maybe tomorrow; maybe next year. So all the dollar holders better start changing them into rubles, rupees, and yuan tout suite.
Then, when the magic date or mark is hit, all the dollars become convertible to the new currency. (I suggest the name “Bucks” but that would lead to “Bucks Suck” and “F* the Buck” protest signs and that’d just be bad for morale. Perhaps they could be “Q”s for “Currency Unit” or “X”s for “Exchange Units” or whatever.)
And then, after the storm has passed…
…we begin again.