Bill Sykes' - In Retrospect
XVII.
(March 2009)
Bill
Sykes looks back in retrospect at material which has
been published in previous editions of "View from
America", in an attempt to determine whether the
subject matter written then is still applicable in
today’s world.
Article #17A. Introduction.
The world economy in recession - bordering upon depression?
A short lesson in economics.
The time has come for me to try to make sense of the rapid deterioration in the
worldwide economies, with special reference to the decline in the American economy
and the current financial situation throughout the world, but it is so complex
that I’m having greatest difficulty in knowing where to start.
Now, if I was a learned and renowned economist the task may be somewhat easier
- but on the other hand I see that some of the so called learned economists,
who should be able to come up with all kinds of solutions to the problems that
the world is having, are apparently struggling to the same extent that I’m
having.
First things first. Before I try to get into the nitty-gritty of the subject
matter may I suggest that we take a look at the current American debt chart -
I believe that would be a good place to start?
U.S. NATIONAL DEBT CLOCK
The Outstanding Public Debt as of 01 Mar 2009 at 11:54:17
PM GMT is:
$10,892,319,484,586.21
The estimated population of the United
States is 305,737,929
so each citizen's share of this debt is $35,626.32.
The National Debt has continued to increase an average
of
$3.62 billion per day since September 28, 2007!
Concerned? Then tell
Congress and the White House!
For those people, like me, who are more than a little
bewildered as to what a trillion dollars looks like,
let me say that a trillion dollars has 12 zeroes to the
left of the decimal point, or in other words a trillion
dollars is a million, million, dollars.
Now that we know
the mathematics, we can see from the above that the "outstanding
United States public debt", as at the time of writing,
is getting close to eleven trillion dollars. Frightening
isn’t it when you consider that the national debt
has more than doubled in the last eight years during
the time that George W. Bush was President and the Republicans
were the majority in the United States Congress, and
the United States budget was balanced when previous President
Clinton ended his Presidency.
So what is the American Government, (under our new President
Barrack Obama), currently doing with respect to the terrible
financial situation that he inherited?
Well one would
assume that the United States Government will do what
it has always done, "throw money at the problem
and hope that it goes away". In
the meantime Congress is doing what they have always done, that is procrastinating
and arguing as to what to do about the situation. The problem is that the "spend
now pay later generation of Americans", which materialized way after World
War Two, were encouraged by the major financial institutions, such as the renowned
United States banks, real estate mortgage brokers, credit card companies, to
spend, spend, spend, and the unsuspecting and appreciative younger generation
did exactly that, they borrowed up to the hilt. The buy now and pay later system
which many of the general public heartily took advantage of, not realizing or
on the other hand not really caring that sooner or later whatever goes up always
come down and the Piper has to be paid. Of course many of the unfortunate debtors
have also maxed out their credit cards which mean that they have no opportunity
of obtaining any monetary assistance from that source.
The credit crunch applies not only to individuals
but it also applies to various States who have also
borrowed up to the hilt. Consider the State of California,
where I reside, which currently has a $42 billion dollar
deficit and apparently is in the process of sending
out 10,000 staff lay-off warning notices.
To indicate the seriousness of the problem, thirteen
Banks in the United States have failed during the month
of January 2009 alone, and many home owners who have
large mortgages now find that housing prices have declined
to the extent that the property value is now less in
value than the price that they initially paid for it
(negative equity), and if the owners do not have the
money to pay their mortgage, due to lay-off or other
circumstances, or even get behind in their monthly
payments then the banks and mortgage lending institutions
foreclose on the property and the poor unfortunate
prior home owners are evicted and become homeless.
Disclaimer:
Some of the information gathered for this news letter
has been gleaned from American and International
media sources, (Including the Internet), and as such
is quoted as accurately as possible. I try to obtain
confirmation on each subject from several outlets,
so the text is a mixture of composite news items
and my personal comments and therefore the reader
must make his/her own judgment as to the reliability
and degree of accuracy of the subjects discussed.
Eric (Bill) Sykes, (Southern California).
March 2009.
We welcome feedback about any of the contents
of these articles. Please send all correspondence
to bill_sykes@huddersfield1.co.uk
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