I’ve never particularly cared for numbers and economics, certainly not when they rise to national or international levels. It’s enough for me to know that “things” in general look good, bad, awful, etc. If I can pay my bills and have a general idea of where my checks are coming from, that’s enough for me. Hell, I don’t even have to worry about a job anymore, for which I am extremely grateful.
But I must say, after watching our so-called leaders in Washington fight tooth and nail for months over budget issues like paying one’s debts, living within one’s means, etc.; watching a feeble eleventh-hour bill get passed with little more in it than a promise to keep fighting; watching the stock market react by nose-diving more than 500 points in one day; and then, finally, watching Standard & Poor’s slap the U.S. with a first-time-in-history lowering of its AAA credit rating (despite S&P’s own $2 trillion accounting error!), I get concerned. I get worried. I might even get scared if I thought it would do any more than elevate my blood pressure and keep me up nights.
At least we aren’t alone in our leaky dinghy; it sounds like a good part of the world is in the same boat — more or less. And it’s good to have company, right? Or maybe not. And, of course, the pundits are talking again about another recession or the second dip of a double-dip recession. This when I thought we were still wallowing at the bottom of the first dip. At least, that’s what my home’s market value indicates; I’m still waiting for it to start climbing back up.
You know, maybe it’s a good thing I don’t know any more about economics than I do. I might get really, seriously freaked out.
I don’t know any more about economics than you do, but I’ve read a lot about it since I first discovered the Keynesian and Austrian schools about 20 years ago. The gist of what I learned can be summed up in a conversation that a long dead president had with prospective candidates for Treasury Secretary.
The president devised a test for choosing the most suitable candidate. He simply asked each applicant this question, “What is two plus two?”
The first interviewee was a journalist. His answer was, “Twenty-two”.
The second was a social worker. She said, “I don’t know the answer but I’m very glad that we had the opportunity to discuss it.”
The third applicant was an engineer. He pulled out a slide rule and came up with an answer “somewhere between 3.999 and 4.001.”
Next came an attorney. He stated that “in the case of Jenkins vs. the Department of the Treasury, two plus two was proven to be four.”
Finally, the president interviewed an accountant. When he asked him what two plus two was, the accountant got up from his chair, went over to the door, closed it, came back and sat down. Leaning across the desk, he said in a low voice, “How much do you want it to be?” He got the job.
I’d laugh, except that’s exactly how accountants and politicians operate.
I have to admit I did chuckle a bit.
I’m like you, I don’t get economics too well BUT I do know that the US is hurting bad financially. My life wouldn’t have changed much if America defaulted but I know my Dad was shaking a bit from it since he pays his rent and doctor bills with his social security checks every month. I agree with you that the deal solved absolutely nothing, it was just a band aid that’s going to get full once again and then we’re (the US) is just going to be right back at that 11th hour once again. I think about S & P’s decision the same way I think about my own credit score, it’s just a bunch of donkey doo.
On a side note, I’m still waiting for The Commander and Chief of the USA to make a statement about everything. The last I heard on AC360, he wasn’t thinking it necessary to make one. I haven’t had my TV or radio on, have I missed it? I find it interesting that he hasn’t spoken to us about it.
I quit listening to Obama a while back. I used to pay serious attention when a president came on TV in prime time to address the nation; it used to mean something really BIG was being announced. But Obama has been on too much, speechifying for too long, and saying little if anything new.
I’m right there with your dad. I’d be up a creek if my Social Security got reduced or stopped. National credit ratings, GDP, balance of trade, debt ratios, QE2, recession, deficit … I don’t care; I can’t do anything about those things. I’ll tend to my budget and act responsibly with what I have. I expect the politicians to do the same with the nation’s budget; that’s their job.
I do think credit ratings are important, but only because other people think they are (the banker from whom you want a loan, etc.). But a credit rating from an organization that makes $2 trillion accounting errors? Sounds like their credit rating should be downgraded.
A Brief History Of Money And Gold
The following linked three pages might help people understand why something as seemingly esoteric as gold’s connection to a nation’s currency is important. All three pages are short, to the point and written for ordinary souls instead of exclusively for doctors of macro-economic philosophy.
Central Bankers Visibly Against Gold
Central Bankers Hidden War Against Gold
Paper Gold, From Alchemists To Central Bankers
On mistaken impressions perpetuated by the news media:
Many people are afraid of a decrease in their monthly Social Security checks. I’ve heard of nobody from either political party entertain such an idea. In the LONG TERM, however, if the FED continues to print counterfeit money (QE3, QE4, etc), the same check won’t represent anywhere near the same purchasing power.
Many people are afraid that their mortgage interest payments are going to be raised. Only NEW mortgages will be affected by changing interest rates unless you have a mortgage contract based on a floating interest rate. Credit card contracts, however, contain clauses that allow their interest rates to be raised on future purchases, but not on purchases made previous to a rate increase.
A final note: Only one presidential candidate understands what’s going on.