Getting it Right - Welcome

The goal of this blog is to publish my thoughts on a variety of economic and political topics in the hopes that people who find them educational or beneficial will utilize them and/or forward to others who might find them interesting and/or worthwhile to promote to others, possibly including politicians who can push some of these ideas to fruition. The topics in my blog are meant to be of value on a long term basis, not a daily diary or political issue of the day log. If the information posted is useful to you, by all means utilize it and/or forward it as you see fit. If not useful, then merely ignore it. There are no universally agreed upon truisms and too little tolerance between some of those with opposing viewpoints to successfully convince the people with hardened opinions to move away from them. I am an analytical type person who will try to be as factual as I am able.

I disdain the current popularity of name calling and condemnation of viewpoints with no factual alternatives or logical solutions given that I see so often. If you don't have a solution based on fact and logic, then opt out of the discussion because you have nothing to contribute. My background is a degree in Economics from the University of Michigan and 39 years working in middle management jobs for a major retailer. My opinions are forged on the personal experence of life, family, friends, and work as well as triumphs and mistakes that I have made and hopefully learned from. My hope is that this blog helps you.

My first topic will be about personal finance. I chose that one first because most of us work long and hard just to survive but not all of us realize our dreams of becoming financially independent from the labors of our work. Much of our political votes/thinking also focus on the economy and in particular how well we are personally doing financially.

It is relatively simple, without sacrificing the enjoyment of living for 'today' and even at moderate incomes, to retire as a millionaire or multi-millionaire, if you focus on that goal consistently from a young age. It is also simple to ensure that your child or grandchild retires rich. It merely requires a one time gift of just $2,000 invested wisely and the passage of time. Please read my first post on this blog to learn more.


Getting it right on Politics, Economics, and Personal Finance

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Wednesday, September 5, 2012

Your Share of the National Debt

Here's the bottom line - there are 312 million Americans today. Each of the 312 million men, woman, and children's share of the national 18 trillion dollar debt is $57,000. That's $228,000 for a family of four. In 10 years, at current spending plans, each of our share of the debt will be $85,000 or $340,000 for a family of four. That doesn't even count the tens of trillions of dollars of unfunded government liabilities for social welfare programs which would triple those numbers at the least. Now, if you took all the wealth from millionaires and billionaires and made them homeless paupers, we could reduce the debt 5 trillion dollars, still leaving 13 trillion in debt plus all those tens of trillions of unfunded liabilities. The math is clear that we cannot tax ourselves out of this problem. The only solution is a huge and permanent reduction in spending.
Sooner or later, the credit to finance the debt will disappear causing interest rates will jump dramatically, and quickly doubling or tripling the interest paid on the debt. the economy will collapse, the entitlement programs will go bankrupt, and there will be no way to be saved from financial disaster because we are too big an economy (unlike Greece which is tiny) for others to even consider saving us.
Put another way that might be easier to understand, imagine a person making only $30,000 a year with a debt of $180,000. Keep in mind that the general rule for long term debt such as mortgages is a maximum of 1 1/2 to two times income. Imagine this person going to a bank to borrow money to finance the $180,000 he already owes. The banker asks him how he is going to pay it back. he says that he doesn't intend to pay it back, but will be borrowing another $5,000 to $10,000 each year from now on, and will only pay interest on the debt - the money for such interest to come from his borrowings. After the banker stops laughing, he escorts the borrower out of his bank without giving him a loan. Now add 8 zeroes to each of those numbers and you have the United States ($3 trillion in annual revenues, $4 trillion in annual spending, and $18 trillion in debt). Worse - that does not include the roughly 75 trillion dollars in unfunded future liabilities.
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