ARE WE A POOR NATION?

In April 2012 the writer Sally Kohn in the USA Today wrote an article that went like this…

           “The way politicians from both parties are shouting from the rooftops about the dangers of the federal debt, you’d think such high rates of borrowing are always cause for alarm. But some of our nations largest and most successful businesses not only run even higher levels of debt – they actually consider carrying significant debt to be good business practice. In fact, the private sector teaches us why increasing government debt right now is a good idea.

           The US generates approximately 14.5 Trillion in GDP each year and carries, currently, $14.3 trillion in debt. That represents a debt-to-income ration of roughly 1 to 1.

           By comparison, here are the debt-to-income rations of some of the leading corporations in America:

IBM 2-1

DUPONT 3-1

UNITED TECHNOLOGIES 3-1

BOEING 4-1

CATEPILLAR 14-1

JP MORGAN CHASE 50-1

           In other words, IBM borrows twice as much money as it earns annually. Boeing borrows four times more than it earns and JP Morgan Chase, clearly not to big to borrow, borrows 50 times more than it earns – getting $50 from lenders for every dollar it makes.

           Sure, if the US were borrowing anywhere near as much as Chase Bank. We’d have legitimate reason to worry. But in general, borrowing money is necessary to invest in the future – whether the future of a business or the future of a nation.”

- Sally Kohn

           Now I don’t know about you America but I have a problem with this philosophy even if just – the businesses have the Feds to bail them out when their astronomical debts can’t be paid! But who bails out America when our $14 Trillion dollar debt implodes on us? (2008 Recession) Who? American citizens that’s who!

– Sherman Bradley