Deficit problem is over exaggerated - absolutely!

[itfitzme]

* That is $GDP per person and the average is near $112k. So the median income should be $112k.

The median is about $50k. "Since 1980, U.S. gross domestic product (GDP) per capita has increased 67%, while median household income has only increased by 15%."

What makes anyone think that the median income should be any different than the average output? *

Your income figure is an average (mean) which is different from the median. *In these kind of statistics, the mean will always be greater than the median because the upper income tail is longer than the lower income tail (there is a zero lower bound). *The telling figure is that the mean grew 67% while the median only grew 15%, which means that the measure of inequality is increasing. *

*Like it or not, the economy is a social system.

I agree that economic institutions such as markets are social constructs just like election systems, legal institutions, and the tax code. *When they don't work as well as society expects, society will want to change them. *Any claim that any social institution has a right to exist absent the benefit it gives society is just hogwash. *Society changes and institutions must change also. *

*This whole division of labor thing and the use of the socio-economic tool of "money" has people confused. *They actually think "money" is the property.....People confuse it for actual goods and work. *

Money is defined functionally as (1) a unit of accounting, (2) a store of value, and (3) a medium of exchange. *The second is largely obsolete today (except for folks who hoard gold coins!). *The other two depend on the concept of a "numeraire", a commodity or instrument that is used to simplify the rate of exchange among many goods. *We want to express the price of a gallon of gasoline in dollars rather than in loaves of bread, gallons of milk, and yachts; we can always work back to the exchange rate from the dollar prices of each of these items. *

So I don't think "money" is the problem. *The problem is thinking about money beyond its functional uses. *Money is easy, it's determining prices that gets complicated!

Yes, the median and the mean are different when the distribution is skewed. *If it wasn't skewed, they'de be the same.

It is very skewed up.

 

[Auteur]

Here are a few numbers to watch tick away
U.S. National Debt Clock : Real Time

Debt is acceptable, provided you can pay it back, and we all know this will never happen. Now to compare the US percentage of debt to GDP with everyone else is simply ridiculous and borders on the absurd. Keep kicking the can down the road and watch the US crumble from within. Just wait for interest rates to rise when QE 4 ends then lets talk.

Private debt is not exactly the same thing as public debt, although those with ulterior motives will try to make you believe it.

Money is an abstraction, and does not have a completely fixed value. Governments, can, and continually do, alter the value of money, through various instruments. Inflation erods the value of money (not a bad thing if contemplating one's own debt), and growth essentially reduces the amount of debt owed in relation to the economy.

Certainly, governments can make foolish decisions, which will have a negative impact on the general population. But you can be sure of one thing: no one is going to come and repossess the White House, or Wall Street, due to unpaid bills. They will be dispossed of one way or another.

Debt was much higher, in relation to GDP, after WW2 than it is today. Yet those bills were paid, and social security programs funded, and the economy did very well in those post war years. Why? Strong economic growth, and taxation and other political policies that supported a large middle class, key to having a healthy economy.

It is not debt that is a problem so much as the stranglehold of the right on the political agenda in the US, the folks who will insist that the country with one of the highest per capita GDPs, and one of the most advanced and efficient economies, cannot afford to pay for pensions, or support hospitals, or build schools. The blatent greed and self-interest here is as transparent as it is distasteful.

In fact, the US could wipe out its debt in a matter of months, if it enacted even some of the taxes commonplace in the west of the world, such as a national value added tax, or even a slightly more progressive income tax system. This is not likely to happen though in today's political climate of raging self-interest, and coporate deification.