America's $7 Trillion Hangover
According to CreditSights, a research firm in New York and London, the U.S. government has put itself on the hook for some $5 trillion, so far, in an attempt to arrest a collapse of the financial system.
In addition to the $5 trillion identified by CreditSights, there are rumblings on the horizon of a growing storm of consumer credit card and college loan defaults.
Some estimates place the potential amount between $1.5 and $2 trillion.
Add to this the potential collapse of the commercial real estate sector that needs an estimated $800 billion in refinancing next year from what increasingly looks like a dry credit well.
With the financial and banking sector unwilling to take the losses, the American taxpayer may well be placed on the hook for what is ultimately $7 to 8 trillion dollars over the course of just 24 months; that in addition to a National Debt that has continued to grow by an average of $3.95 billion a day since September, 2007.
Rounded to $4 billion a day, the President’s proposed automakers bailout only amounts to four days worth of additional national debt. At that rate, why not go ahead and take Friday off? Maybe we’ll save an additional $4 billion?!
I know, I know; it doesn’t work that way. But it’s a nice a thought, nonetheless.
As of today, each citizen's share of the National Debt is $34,851.77.
On average, Bare Knuckled readership runs at about 68 faithful readers and wandering souls a day. So, if all the Bare Knuckled faithful would be so kind as to send their checks off to the Treasury for their share this afternoon, collectively we could knock out our $2,404,772.10 share of the tab.
On the other hand, were all my 361 Twitter friends and followers to fire off their checks to Washington today, we’d cover a none too shabby $12,581,488.97 worth of the bill.
While I'm sure Hank Paulson would be oh so appreciative and inspired by our selfless act of noble citizenship, at a party that's running up a roughly $4 billion bar tab a day, that's not even a round of well shots, much less top shelf or my personal favorite, Jagermeister.
As I told my American Government class recently, what is truly frightening is the increasing ease with which commentators, politicians and governmental officials use the term “trillions of dollars”.
We're long past the fabled "a billion here, a billion there and pretty soon you're talking about real money."
Make no mistake about it. This is GENERATIONAL debt we're talking about here.
Debt that will outlive the political leaders, captains of industry and fallen financial titans responsible for it by decades and yes, generations.
Despite this, Democrats in Congress and the President-elect have been tossing around $700 to $800 billion figures for a proposed fast-tracked stimulus package that would await his signature soon after his recitation of the Oath of Office.
No doubt Speaker Pelosi and Majority Leader Reid will use the deepening recession as justification to move ahead with a universal health care program that conservative estimates indicate will add an additional $100 to $150 billion dollars to the annual budget deficit a year. With inflation, that's quickly headed towards tossing another $1.75 to $2 trillion on to the National Bar Tab over a decade.
Then again, when you're running trillion dollar-plus deficits annually and toss on between $5 and $8 trillion in a single a year, what's another $100 billion between friends?
The problem is no one's had the good sense to close the tab, much less give any serious thought as to how we're going pay it off.
To hell with the hangover, this should instantly sober up every American from the halls of Congress to baby's lying in maternity wings with an instant $35,000 IOU attached to their birth certificates.
I'm not fool or arrogant enough to think I have the answer that will magically get us out of the dire straits we currently find ourselves in. However, I would dare say a first step is to take a deep breath, calm down and look at the long term, generational impact of the decisions that are currently being considered by our leaders.
Put the shot glass down, close the tab, step away from the bar, drink a pot of coffee, toss back some Tylenol and think this thing through. Failing that, we're going to drink ourselves to death and leave our children, grand children and great grand children to struggle to pay off the tab.
Last call, faithful readers? Stay tuned for further updates as events warrant and the demon in the bottle seductively asks, "What harm can one more round do? Just one more round...."
In addition to the $5 trillion identified by CreditSights, there are rumblings on the horizon of a growing storm of consumer credit card and college loan defaults.
Some estimates place the potential amount between $1.5 and $2 trillion.
Add to this the potential collapse of the commercial real estate sector that needs an estimated $800 billion in refinancing next year from what increasingly looks like a dry credit well.
With the financial and banking sector unwilling to take the losses, the American taxpayer may well be placed on the hook for what is ultimately $7 to 8 trillion dollars over the course of just 24 months; that in addition to a National Debt that has continued to grow by an average of $3.95 billion a day since September, 2007.
Rounded to $4 billion a day, the President’s proposed automakers bailout only amounts to four days worth of additional national debt. At that rate, why not go ahead and take Friday off? Maybe we’ll save an additional $4 billion?!
I know, I know; it doesn’t work that way. But it’s a nice a thought, nonetheless.
As of today, each citizen's share of the National Debt is $34,851.77.
On average, Bare Knuckled readership runs at about 68 faithful readers and wandering souls a day. So, if all the Bare Knuckled faithful would be so kind as to send their checks off to the Treasury for their share this afternoon, collectively we could knock out our $2,404,772.10 share of the tab.
On the other hand, were all my 361 Twitter friends and followers to fire off their checks to Washington today, we’d cover a none too shabby $12,581,488.97 worth of the bill.
While I'm sure Hank Paulson would be oh so appreciative and inspired by our selfless act of noble citizenship, at a party that's running up a roughly $4 billion bar tab a day, that's not even a round of well shots, much less top shelf or my personal favorite, Jagermeister.
As I told my American Government class recently, what is truly frightening is the increasing ease with which commentators, politicians and governmental officials use the term “trillions of dollars”.
We're long past the fabled "a billion here, a billion there and pretty soon you're talking about real money."
Make no mistake about it. This is GENERATIONAL debt we're talking about here.
Debt that will outlive the political leaders, captains of industry and fallen financial titans responsible for it by decades and yes, generations.
Despite this, Democrats in Congress and the President-elect have been tossing around $700 to $800 billion figures for a proposed fast-tracked stimulus package that would await his signature soon after his recitation of the Oath of Office.
No doubt Speaker Pelosi and Majority Leader Reid will use the deepening recession as justification to move ahead with a universal health care program that conservative estimates indicate will add an additional $100 to $150 billion dollars to the annual budget deficit a year. With inflation, that's quickly headed towards tossing another $1.75 to $2 trillion on to the National Bar Tab over a decade.
Then again, when you're running trillion dollar-plus deficits annually and toss on between $5 and $8 trillion in a single a year, what's another $100 billion between friends?
The problem is no one's had the good sense to close the tab, much less give any serious thought as to how we're going pay it off.
To hell with the hangover, this should instantly sober up every American from the halls of Congress to baby's lying in maternity wings with an instant $35,000 IOU attached to their birth certificates.
I'm not fool or arrogant enough to think I have the answer that will magically get us out of the dire straits we currently find ourselves in. However, I would dare say a first step is to take a deep breath, calm down and look at the long term, generational impact of the decisions that are currently being considered by our leaders.
Put the shot glass down, close the tab, step away from the bar, drink a pot of coffee, toss back some Tylenol and think this thing through. Failing that, we're going to drink ourselves to death and leave our children, grand children and great grand children to struggle to pay off the tab.
Last call, faithful readers? Stay tuned for further updates as events warrant and the demon in the bottle seductively asks, "What harm can one more round do? Just one more round...."
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