Default risks, war, banks and education.....
I have returned to ranting, Don Quixote style, about the economy. A very interesting couple of articles in today’s Guardian caught my eye (and distracted me from moving office and the associated politics). The first, which I am having a bit of trouble linking to the article on-line but it is called White House plans emergency cuts as debt deadline looms and that link may work now.
We have all heard about the US and their need to raise the debt ceiling – in other words to extend their credit limit in order to pay their bills. I am going to stay away from the politics of this – ni have my own suspicions as to why there are delays – and look instead at what sort of debt we are talking about. I have seen lots of on-line posts about the need to cut senators’ pay etc as a way of cutting the debt and that always interests me. Not so much the relative pay merits of politicians but peoples’ trouble with big numbers. I had great fun disusing with Beth the meaning of infinity – I’m pretty sure she gets the concept despite my attempts to help – do not use the idea that it is “more than the number of atoms in the universe” with an eight year old – an analogy too far!
The present debt ceiling stands at $14.3 trillion – what on earth does that actually mean? Well it is a million millions (confusingly not a billion which is a thousand million in the short scale system). That’s a big number. Amazingly and quite coincidentally it is almost exactly what the US produces in a year – in other words its turnover matches its debt. But that also means it is a debt of about $47,000 per person or about $1.5million per square km – dear real estate! Ok enough numbers – but the scale thing is important – a trillion is a big number.
The debt is blamed on a few things and in truth all are responsible. Your debt and mine is linked to every single piece of expenditure we do – and every choice we make not to earn more – it is not caused by one single bit of expenditure, those bits simple tip us further. So let’s have a look at the US. Of that debt a tenth is the wars fought since 2001, which is half the Bush tax cuts themselves more than expenditure on education, welfare, and medicine. Put another way the wars and social security, education and medicine do not amount to the total cut in taxes by Bush – and I’m pretty sure the US wan’t a high tax country to begin with. Of course the recession has dented tax income to the Government – about a quarter of the debt is explained by this. So a fall in tax revenues and cut in taxes together amount to almost half of the US debt.
Let’s go back to our senators and representatives pay and see if we can solve some of this problem. There are 100 senators and 441 representatives (hmm strangely less than in UK....). Ok so what can we do to save money here? Well there are 551 ‘overpiad bums ’. if each cost a million apiece in pay and expenses (they don’t cost anything like that I’m just rounding up because if I rounded down it would be 0 and a number divided by 0 is infinite and, well atoms and such nonsense again...). Right so 551 times a million is $551 million – about one forty thousandth of what it pays to farmers in subsidies – 10 days worth if you prefer. Given my crazy rounding up we are probably over twice what is needed here. So farmers cost more in 5 days than Government representation. Why am I picking on farmers you may ask? No reason other than I spotted the word subsidy and did a bit of math (sorry). But I am interested that the States rounds on ‘fat cat congressmen’, ‘the war’ and ‘welfare’. We have seen already that these are significantly smaller added together than previous tax cuts. I am not advocating war by the way, not arguing for it, what concerns me is that this trans-Atlantic narrative about democracy being too dear, about tax cuts for the wealthy being the best option and about spend thrift hospitals and schools disturbs me –for its attack on democracy, its fuelling of greed and its under investment in our future – as simple as that.
So what am I suggesting? Well strangely nothing relating to tax and spend. I don’t have a political agenda here. I am more interested in the way language is used to distract us from the real numbers towards ones that shock – probably for political motive. I am also interested in our lack of connection. As I sit in a cafe and type I am amazed by the number of people who leave the door open on cooler days (I don’t notice on warm ones). The cold that comes in cools the room, the thermostats kick in and it warms the room, the cost of this impacts on the business expenses, these expenses impact on price. Do the people who leave the door open appreciate they are adding to the cost of their food and drink? I appreciate it is a stretched analogy – but the same happens in society. We seldom fully appreciate the linked behaviours that return to impact on us. Tax payers are happy to get a lower price for cash and then sneer at benefit cheats. We are part of society; we are protected by the police and by welfare and health payments to others.
War is a tragedy because it costs lives, not because it costs money. Tax cuts mean service cuts. Underfunded education and over-testing means a lack of progression (I better return to that in another blog). Oh and you didn’t think I had forgot, did you? Government debt has grown as a direct result of the banking collapse. The excesses of finance have cost the US at least two trillion dollars. Not their national debt but more than war, more than education and, bizarrely, less than the tax cuts. I guess the incompetent need a bit of a prop......
I have returned to ranting, Don Quixote style, about the economy. A very interesting couple of articles in today’s Guardian caught my eye (and distracted me from moving office and the associated politics). The first, which I am having a bit of trouble linking to the article on-line but it is called White House plans emergency cuts as debt deadline looms and that link may work now.
We have all heard about the US and their need to raise the debt ceiling – in other words to extend their credit limit in order to pay their bills. I am going to stay away from the politics of this – ni have my own suspicions as to why there are delays – and look instead at what sort of debt we are talking about. I have seen lots of on-line posts about the need to cut senators’ pay etc as a way of cutting the debt and that always interests me. Not so much the relative pay merits of politicians but peoples’ trouble with big numbers. I had great fun disusing with Beth the meaning of infinity – I’m pretty sure she gets the concept despite my attempts to help – do not use the idea that it is “more than the number of atoms in the universe” with an eight year old – an analogy too far!
The present debt ceiling stands at $14.3 trillion – what on earth does that actually mean? Well it is a million millions (confusingly not a billion which is a thousand million in the short scale system). That’s a big number. Amazingly and quite coincidentally it is almost exactly what the US produces in a year – in other words its turnover matches its debt. But that also means it is a debt of about $47,000 per person or about $1.5million per square km – dear real estate! Ok enough numbers – but the scale thing is important – a trillion is a big number.
The debt is blamed on a few things and in truth all are responsible. Your debt and mine is linked to every single piece of expenditure we do – and every choice we make not to earn more – it is not caused by one single bit of expenditure, those bits simple tip us further. So let’s have a look at the US. Of that debt a tenth is the wars fought since 2001, which is half the Bush tax cuts themselves more than expenditure on education, welfare, and medicine. Put another way the wars and social security, education and medicine do not amount to the total cut in taxes by Bush – and I’m pretty sure the US wan’t a high tax country to begin with. Of course the recession has dented tax income to the Government – about a quarter of the debt is explained by this. So a fall in tax revenues and cut in taxes together amount to almost half of the US debt.
Let’s go back to our senators and representatives pay and see if we can solve some of this problem. There are 100 senators and 441 representatives (hmm strangely less than in UK....). Ok so what can we do to save money here? Well there are 551 ‘overpiad bums ’. if each cost a million apiece in pay and expenses (they don’t cost anything like that I’m just rounding up because if I rounded down it would be 0 and a number divided by 0 is infinite and, well atoms and such nonsense again...). Right so 551 times a million is $551 million – about one forty thousandth of what it pays to farmers in subsidies – 10 days worth if you prefer. Given my crazy rounding up we are probably over twice what is needed here. So farmers cost more in 5 days than Government representation. Why am I picking on farmers you may ask? No reason other than I spotted the word subsidy and did a bit of math (sorry). But I am interested that the States rounds on ‘fat cat congressmen’, ‘the war’ and ‘welfare’. We have seen already that these are significantly smaller added together than previous tax cuts. I am not advocating war by the way, not arguing for it, what concerns me is that this trans-Atlantic narrative about democracy being too dear, about tax cuts for the wealthy being the best option and about spend thrift hospitals and schools disturbs me –for its attack on democracy, its fuelling of greed and its under investment in our future – as simple as that.
So what am I suggesting? Well strangely nothing relating to tax and spend. I don’t have a political agenda here. I am more interested in the way language is used to distract us from the real numbers towards ones that shock – probably for political motive. I am also interested in our lack of connection. As I sit in a cafe and type I am amazed by the number of people who leave the door open on cooler days (I don’t notice on warm ones). The cold that comes in cools the room, the thermostats kick in and it warms the room, the cost of this impacts on the business expenses, these expenses impact on price. Do the people who leave the door open appreciate they are adding to the cost of their food and drink? I appreciate it is a stretched analogy – but the same happens in society. We seldom fully appreciate the linked behaviours that return to impact on us. Tax payers are happy to get a lower price for cash and then sneer at benefit cheats. We are part of society; we are protected by the police and by welfare and health payments to others.
War is a tragedy because it costs lives, not because it costs money. Tax cuts mean service cuts. Underfunded education and over-testing means a lack of progression (I better return to that in another blog). Oh and you didn’t think I had forgot, did you? Government debt has grown as a direct result of the banking collapse. The excesses of finance have cost the US at least two trillion dollars. Not their national debt but more than war, more than education and, bizarrely, less than the tax cuts. I guess the incompetent need a bit of a prop......
RSS Feed
