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One Nation, Under God, with liberty and Debt for all….

Before we start, I am not an economist, and I have never taken an economics class, this is just my opinion, so take it or leave it.

It has been hard to miss all the news about how the economy is not doing well, and that we are looking at a recession. The story of our floundering economy has become big enough that it has even topped the list of voter concerns for the 2008 Election (we are more concerned about the economy that the war in Iraq). With all that said, how did we get to where we are? Lots of people blame it on the housing slump, and while I am sure that has something to do with it, I do not think that is the real cause.

I think that the real cause to this problem is that we are a nation of debtors. We want everything now, and we use credit to get what we want, when we want it. Lets look at some scary numbers :

• As a nation we carry 1.7 trillion Dollars in consumer debt
• We were charged 50 billion in interest in 2001
• According to Master Card, we charged more in the last quarter of 2007 then we did in the entire year of 2006.

With the easy access that most of us have to credit, we have become addicted to it, and we are now out of control.

You would hope that with our personal debt situation is not the rosiest of pictures, maybe the Government’s debt picture is better. Wrong, While you should lead by example, our Government is not doing a very good job. The national debt is larger enough that if we divided it equally among every man, woman, and child in the country (around 302 million of us…) we each would owe around $31,000. So what is the first thing that everyone tells you to do to get out of debt? Stop spending more than you make. Sounds pretty simple, if you do not spend more than you make, then you do not have to borrow and money. In president Bush’s plan for the 2008 budget (released today 2-4-2008), increases spending by about 6% over last year, and adds an additional 410 billion to the national debt. That means that President Bush plans on spending 13% more money this year then we are expected to take in. With our economy heading south, I would have to imagine that we will actually be taking in less money than last year, so that number is likely to grow even larger. On top of that, the 3.1 trillion dollar budget only includes 70 billion for fighting the war in Iraq. We will need more than that so, that 13% percent number seems to be a Best Case Scenario.

So who do we have to blame for this? We can look around and try to pin the blame on somebody or something else but really, what it comes down to is that we are spending more than we make, and we only have ourselves to blame for it.

Ian