There's a hole in my pocket...

As we have discussed this issue before, we are in the midst of the largest transfer of wealth in the world's history. We, the United States, are selling ourselves off to other countries. We are highly dependent on countries like Saudi Arabia and the rest of the middle east including Iraq for over 70% of our oil needs, as well as, Japan and China for maintaining our financial stability. Who you do you think is giving us all the money for us that we use to live? On the financial side, Japan and China are the one's buying up most of our treasuries bills. Then, the securities are either sold on the open market or directly to the Federal Reserve. The U.S. public debt, as of July 2007 stood at $8.887 trillion. In addition to the national debt, the State and Local debt at the end of 2006 stood at just over $2 trillion. If you look to the right of this blog you will see the running tab of our national debt. Some consider, and perhaps rightly so, that all government liabilities, including those that the government has contracted for but not yet paid, should also be included in the national debt. Corporations must report such liabilities in their annual financial statements under G.A.A.P.(Generally Accepted Accounting Principles).

These “off-balance sheet” items include future payments for federal pensions, Medicare and Social Security. These accounts have been used creatively for years to facilitate a more balanced budget by borrowing from this fund. Through the inclusion of these obligations into the equation would dramatically increase the U.S. national debt to $59.1 trillion. That's 403% of GDP(Gross Domestic Product). On a per capita basis this amounts to $516,348 for every U.S. household! By means of comparison, the average American household currently owes approx. $120,000 for mortgages, car loans, credit cards and all other debt combined. With a declining working population and an increasing retiring population the math simply cannot add up no matter how one tries.

You may not be aware of this but Japan held the biggest note on the US, at the end of 2006, with over $600 Billion. China owned over $400 Billion. I'm sure glad we're all friends, eh? Perhaps this is why our government put China on the favored trade list of countries. Of the U.S. debt owned by foreigners, central banks own 64% with private investors owning nearly all the rest. As of the end of 2006, U.S. treasuries made up 33% of Mainland China’s official foreign exchange reserves and 68% of Japan’s!

The Department of the Treasury publishes The Debt to the Penny and Who Holds It. This up-to-date information divides the debt into two sections – Public and Intergovernmental Holdings. The former grouping includes U.S. citizens and foreigners. “The magnitude of the foreign-owned portion of the national debt is nearly three times the total amount of currency in circulation! Official numbers released by the Federal Reserve for June 2007 show the volume of currency at US$755 billion.” It seems odd, but that number seems to have a familiar ring to it...?

Our country is in debt just as millions of Americans are with their debt. Wow, could this be what we call "trickle down economics"? The irony of it is that China lends us money and buys our treasuries, we are “given” a stimulus check for a few hundred dollars and then we spend it on products made in other countries - like China, at Walmart. Then we have to foot the bill for this debt, at interest!

The problem that will arise with the Repugnicants spouting to "drill, baby, drill" is that the oil drilled in the reserves probably will NOT stay in the United States. This is a free economic world of exchange of goods. In a very short time the United States will not be the most consuming country looking for this commodity. China will begin to surpass our consumption very soon as their economy expands, as well as, their massive population increases its income and needs and desires for oil.

This is a global business and as soon as this is pumped out of the ground it will be sold to the highest bidder. That is capitalism and a global corporatocracy. Perhaps if we were to nationalize the reserves we would mandate that the oil stay in our own backyard. You know, they did this with the inclusion of Eminent Domain for Real Estate. Right! Would you really trust our government to take care of such a delicate issue? They cannot even balance their checkbook.

Brazil is in serious administrative discussions at this very date to nationalize their oil. That country is seeing the upcoming problem and they began converting to ethanol, over ten years ago. This has helped them to become completely energy independent. They do still use oil, however it is oil they drilled for themselves. Now, they begun to export their extra ethanol they produce. Their sugar cane ethanol is much more cost effective than the corn ethanol, our country espouses to. Corn ethanol is a lose lose venture, and it is currently highly subsidized so in financial terms our country is taking one step forward and two steps back on that issue. It sounds good in the sound bites and save a bit of the environment on the exhaust coming out of the cars, but the manufacturing and water consumption for this product is a losing venture. Or, we could begin to trade for ethanol with Brazil. Then will we, simply find ourselves trading OPEC for Brazil? Perhaps this is why there is the private discussions to create the Amero.


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(c)Copyright 2008 Doug Boggs