The Richest Country On Earth

The last several years of following politics, the one phrase politicians will use is "We are the richest nation on earth" so we need to do this program. That is code for more government spending and higher taxes.

Lets look at this statement from a economics standpoint. Economics is much different then government expansion/spending theory. Economics deals with real science and physics. More importantly, lets look at the United States and apply this statement.

RICH - adjective, -er, -est, noun
having wealth or great possessions; abundantly supplied with resources, means, or funds; wealthy: a rich man; a rich nation.

WEALTH -
a great quantity or store of money, valuable possessions, property, or other riches

Looking at these two dictionary terms of Rich and Wealth, they shed a better understanding of what the US has when debunking a persons understanding of the above statement. Many Americans in political terms and some economists get caught up of the "income" of a nation when debating policy. Income numbers mean nothing to most economists when looked at in the terms of wealth. You can make $1 Million dollars a year and have nothing in the terms of wealth. The money that comes in is spent and not saved or used to acquire possessions that gain value. Then look on the low end of incomes of someone who makes $40,000 dollars a year, and they may have savings/retirment accounts built up and a paid off house.

These incomes change from year to year and go up and down. The people earning these incomes can adjust to be better savers or end up going bankrupt through their actions. Now looking at our nation, we are in a bad spot. Individuals for the last couple of decades decided to not live within their means and live on credit. Equity in homes that was once at 75% in the early 80's is now at a terrible low level of 20%. Credit cards being used as a normal practice to buy things is now a major cancer to our personal debt. The banks aided in this spending frenzy by teaming up with the federal government in backing toxic loans to people with bad credit. It felt good for banks on short term gain and the politicians looked like super-heros with political slogans of "Helping the poor" and "Getting Americans into homes".

Now we have trillions in toxic bank assets that need to be flushed into the economy and dealth with. Home values are being fictiously propped up by federal government bailout money that was either just printed off from the Federal Reserve or borrowed from China.

Economics of the individualist is playing out as well. The government wants people to spend because our society is 70% consumption. That is not happening and here are some stats: Last month consumers paid down $21 Billion in debt vs. to the forecasted $4 Billion. Another economic fact is the American people are saving at a 5%-6% savings rate. We atleast have a decade of cleaning up the mess of the consumer, but what many are worried about is the many of decades of cleaning up the federal governments debt.

Federal/State liabilities of social spending is so broken no one wants to fix it. The longer we wait the worse the situation gets. I have seen many studies where if you take all the personal wealth of the American citizens it would not even come close to covering the liabilities in debt the federal government owns. Want proof how much it is affecting our nation, the dollar is slowly losing value and is now hovering around .68 cents of worth.

America is losing economic power very quickly while politicians focus on citizens incomes. Citizens should be very worried about their wealth being taken away through social engineering.