Debt and More Debt

I just pulled a beer out of the freezer and opened it and then immediately took a swallow.  It entered my mouth as a liquid and then turned to solid ice.  Now, that is a cold beer.  All beer lovers would be jealous.  I can explain this from nucleation theory, but who cares.  It was a cool, once in a life time experience, I suspect.

Well, what is happening in our financial markets is not so mysterious.  Why is "what's gone wrong with our economy" such a great mystery that needs a lot of explanation.  We are nearly 10 trillion dollars in debt in this country.  We are spending a half trillion dollars a year that we don't have in Iraq.  Our social security system is near bust.  GM owes more money to retirement funds than it has.  Our energy bill is going through the roof.   As a country, we are near bankruptcy, not financially yet, but bankruptcy of the spirit.  As a country and as individuals we are seriously in debt, but we are not at the end of our rope.  Our country owes about one year of its income (GNP) in debt.  High, but not undoable.  But, the problem comes in that we do not recognize the economic realities.

First, as individuals we bought more than we could afford.  The Fed passed out cheap money and we bought homes we could not afford.  Not very profound.  Ok, go punish the guilty, but that won't solve the problem.  We have to suffer through the pain, but we will get through it, lower house prices and all.  They will go back to the normal 10 to 12% a year increase.  Usual stuff, they will return to the least square line increase, etc.

We can not afford the war in Iraq.  Period.  Don't worry about what will happen to Iraq if we pull out too soon.  Worry about what will happen to us if we don't do it soon, very soon.

Energy.  Wake up, America.  Energy costs are pulling us down like a concrete weight around the leg of a man thrown overboard by the mob.  Conservation, nuclear, alternative, free market, etc. nothing profound required here, just let the American entreprenuer be free.  Get rid of tarriffs on ethanol, don't penalize oil companies for making a profit, expedite environmental permits for new plants, fund clean coal incentives, raise cafe (car mileage requirements) limits, improve the grid (for wind power), and reward efficiencies improvements.  More on these later, tonight is a very simple run down of the basics.  Too much debt is bad.