Politicians create catchy names and word pictures to undermine economic ideas they dislike.
Jesse Jackson disliked “Reaganomics.” Ross Perot described the relocation of jobs to Mexico as “the giant sucking sound.”
America’s insane spending policies of both major political parties have been renamed by me as “Newmanomics” in honor of “Mad Magazine” way too cool cover guy Alfred E. Newman.
His mantra: “what, me worry?”
Not only do many American people, companies, and government officials spend like drunken sailors, some blame “foreigners” for our plight.
Having some alcoholic relatives, I understand how denial works. Denial is simply self-deception.
Can’t we blame China? After all, they consume 382 million tons of grain compared to 278 million tons in America annually. China uses twice as much steel as we do. China uses 800 million tons of coal to our 574 million tons annually. China oil imports are up 34%.
Since China has 1.3 billion people, and we have about 300 million, China consumes less on a per person basis than us. Moreover, China is rapidly transforming itself into a modern superpower. We can’t blame China for our woes.
Our problem is not China, India, Japan, South Korea or any Asian bogeyman.
As Pogo says, “we have met the enemy, and he is us.” The USA is not a victim of anything or anyone external.
We’ve bought Washington’s “Newmanomics” bunk hook, line and sinker.
Therefore, “what, me worry?” is our vote-producing, bipartisan, nonsensical consensus economic philosophy.
You see, as disciples of “Newmanomics,” we can always print more money, sell more debt to Asian nations and banks, increase taxes on the “rich” (anyone making a dollar a year more than we do), and give tax breaks to industries contributing to last year’s elections.
Excessive debt-public and private–is weakening the US Dollar and the American economy.
US Government debt stands at $ 8.00 trillion, which increases a mere $1.76 billion daily. That works out to $26,222 of federal government debt per American man, woman and child.
At least $2.0 trillion of our U.S. government debt is held by persons and institutions in other countries.
If they begin to perceive the US Dollar as weakened, they can refuse of buy more US debt instruments and/or demand higher rates of return, possibly setting off a spiral of inflation here at home.
American corporate debt increased by $1.0 trillion in the last five years to $5.2 trillion.
$453 billion of Ford and General Motors corporate bonds (a form of debt)have been downgraded as “junk bonds.” Their value is likely to erode speedily and sink like a heavy rock.
This $453 billion is 15 times more than the bonds involved in the WorldCom meltdown.
Personal household debt averages $101,445 per American family.
Finally, these debts do not include those of states and municipalities, underfunded private pensions, government pensions, and totally unquantified, underfunded, almost eternal liabilities of Social Security and Medicare.
Americans have always risen to the challenge and found new ways to make more money as circumstances change and new opportunities arise.
Alfred E. Newman is right. Worry is useless. In a shaky economy, build your own business and manage your own money.