In The Red

A buddy of mine at lunch the other day wondered aloud what the difference was between the deficit and the debt.

I think I'm fairly well up to speed on these sorts of things, but the reality is I don't know Jack. I couldn't answer that question with any degree of certainty. Both certainly sound like borrowing, eh? The only thing I said is that the deficit is the difference between this year's government income and spending and the debt is the cumulative difference. Probably not correct, but it's all I could offer.

We are into a $455 billion (that's four hundred and fifty five thousand million) deficit for 2008. One thing I know about the deficit -- it's just an indicator of the mismatch between what Merikans want from their government and what they are willing to pay in taxes to get it.

The thing about the national debt, as my investment manager once told me, is that as long as you grow your economy faster than you grow your debt, it doesn't mean shit. If you take on more debt but are able to use that borrowing to grow your income faster than your debt servicing, you can carry trillions in debt, no problem. Now that we've gone into 14 digits, the debt clock has run out of digits:


Apparently, no one gives a shit because it doesn't mean shit. No one knows what it means to be this much in the hole, even people like me who try to understand it. Should I give a shit, and why, exactly, should I? As it grew from $5 trillion to $10 trillion, I didn't hear anything about it. And as it grows to $100 trillion, I will still likely not hear anything about it. The old story line is "let our grandchildren deal with it." The good news for them is that's exactly what they'll to say to their grandchildren about their $1,000 trillion (quadrillion) debt -- just take in the dirty laundry from the next village and pass yours to the next. I'll bet a chicken dinner that people in the 1930's used to say "we're just passing this generational debt to our grandchildren." Well, their grandchildren did pretty well with all that debt, now didn't they?

The State of California is into a $10 billion state deficit this year, the difference between what we want from the state vs. what we're paying in taxes to get it. The City of Elk Grove is planning on a $1.4 million city deficit for 2009, on top of a $1.1 million 2008 deficit.

So every level of government that represents me, the Monologueonian, is operating in the red. On every level, as well as on every personal level, we are living beyond our exceptional status.