04 June 2011

Take It Down A Notch

Once again, Dear Reader, we have been assaulted with hand wringing anxiety about the national debt.

Mind you, this is not a non problem, but I land with Paul Krugman and Joseph Sitglitz, who believe we need not eviscerate government right now and should raise some taxes and do other non conservative stuff. Aside from liking their ideas better, they are also more accurate in their predictions than all of the economic conservatives.

No kidding, someone went back and tallied up the predictions the pundits made and found out that the liberal economists were more accurate. I wish I could find the story. Please tell me if you saw it and where.

Anyway, the hysteria about the debt is more fueled by conservatives than liberals (who after all just 'tax and spend'). But they get our attention with the unimaginable idea of 14.3 trillion dollars. NPR reported that it would be the same as carpeting Illinois with dollar bills.

But that number is arbitrary. It is simply how we denominate our currency. What if we chose something else? If gold is now about $1500 an ounce that would mean one billion ounces would be the national debt. At 16 ounces to the pound that would mean 31,250,000 tons. According to one website, that's roughly the amount of food the US wastes in a year. Still a rather inconceivable amount.

The best way to make these numbers less confounding is to do what every nation must do from time to time - recalibrate its currency. Ten years ago I was in Italy where 2000 lira equalled $1. Originally the word was libra, for pound, and meant a pound of silver. Now, a pound of silver is not as valuable as gold, but it was worth far more than a $1 in 2001, and 2000 lira should ostensibly mean a ton of silver. Talk about inflation!

I say we should simply shave off a few zeros the way Italy substituted lira for euros. Three should do it. In an instant Bill Gates and Warren Buffet go from multi-billionaires to multi-millionaires. My house is now worth more like $3,700 which is just under about what my folks paid fifty years ago. A new car would be between $200 and $450.

It all gets a lot easier doesn't it? The national debt would be but 14.3 billion, which is a lot easier to father, and this is important because until we can actually think about it we can do nothing about it.

Which is precisely what powerful people prefer. The real danger is not the debt but that ordinary people might begin to understand it and everything else along with it. Like, for example, the fact that the richest 1% own more than the lowest 90%. Why does that fact not bother us as much as the national debt? Or the fact that the Forbes 400 (people) collectively own $1.37 trillion.

400 people could pay off 10% of the national debt. I can easily imagine that, even now.

1 comment:

Anonymous said...

Aughhhh! Fred, you have given me a headache! I'm going to have to take one large Excedrin! Just one, no zeroes!