Drowning In Debt

The United States government is drowning in debt (so is the citizenry but that is whole other mess) and the rating agencies are finally starting to figure it out. S&P cut the US's debt outlook from stable to negative. This is recognition of our worsening federal budget situation and the impending future explosion of costs.

Such a warning may be a precursor to lowering the US's credit rating from it's currently perfect AAA unless we are able to rein in rising costs. The US national debt is expected to approach or exceed 100% of our GDP (annual economic output) by late this year or early  next year by many estimates. At this point the country is technically insolvent from a fundamental stand-point. If the US were to lose it's perfect credit rating the result would likely be a spike in interest rates since most consumer rates are tied to government bond rates which would rise if our credit risk were perceived as increased. For those of you interested click here to view debt ratios and forecasts for most countries. You can also read more about S&P's change in a Wall Street Journal article by clicking here.

The current size of our deficit is truly astounding...recently in the news was the near government shut-down over the budget battle in which one of the major arguing points was whether to cut ~$30 billion in spending or ~$40 billion. Just to put that in perspective our projected deficit is ~$1.5 trillion so our leaders spent weeks arguing over what amounts to 2% of the budget problem on the low end and 2.67% on the high end...anyone see the problem with that?

If you want to get a real-time look at lot of the economic stats check out US Debt Clock.org

Nanny State Expanded!

I ran across this article while scanning headlines and I was so disgusted I just had to post it. Apparently there are some legislators that think they need to be able to dictate every minor detail of our life including whether or not it's legal to jog with ear buds in your ear or walk while you text. It seems there is no end in sight to what politicians believe they can do better than you can.

The Power of Texas

Ever wonder how a government should act if it wants a thriving private-sector with low unemployment and a better than average budget situation over the long-term? Apparently a lot like the State of Texas. Check out this article if you want to know more. While I don't believe that TX is perfect by any means it does seem to be doing better than most. Why?

In a nutshell:

• Low taxes
• Lower average regulatory burdens
• State that works hard to maintain a balanced budget
• Government that generally leaves the private sector to do what it does best - create jobs and grow!