After spending the day looking at the pitiful remains of my 401K, and despondent of finding a good way to protect the rest of it, I got out of the apartment by going to the movies, this one a showing of I.O.U.I.S.A., a whodunit about our outlandish national debt, on its way to ten trillion dollars, a bit under two hundred grand of debt for each of us.
The movie, even the cut down version did a good job showing the problem, but didn’t say much about a solution. Neither did the panelists, who seemed to have nothing better to say than “Don’t buy what you can’t afford.”
But the quote of the day came from Bill Emmons, an economist at the Fed. After pooh-poohing the inflationary effects of the Bailout, claiming it would get lost in the wash, he then said that our debt wasn’t that bad at all, since we got it at very good interest rates that were less than our GDP growth rate:
It’s like a Ponzi scheme…that works!
Oh. Really. Well, yeah, of course Ponzi schemes work…if you are the one at the top of the pyramid–like the Fed, instead of at the bottom–like us.