It’s time to sit back, relax and enjoy a little joe…
Blogs I’ve Been Following This Week
Welcome to another rousing edition of Black Coffee, your off-beat weekly round-up of what’s been going on in the world of money and personal finance. Here’s what caught my attention over the past week…
Talk about being tied up this week. I’m trying to read almost 100 articles in preparation for this Sunday’s Best of the Best in Money and Personal Finance Carnival. Then I’m off to Las Vegas for a little fun time with the panel experts from my name-brand vs. store-brand taste-test challenge – and if I can get a moment while I am there, I’m also going to try and meet up with Greg McFarlane and Betty Kincaid, authors of Control Your Cash: Making Money Make Sense.
That’s why I hope you’ll forgive me and excuse the fact that I dropped the smart-ass commentary this week for my recommended picks o’ the week. I promise to return with my usual smarmy commentary next week.
Early Retirement Extreme – The Ant and the Grasshopper
Darwin’s Finance - The Staggering Cost of Divorce: A Tale of Financial Ruin
Bucksome Boomer - Ideas for Buying Art on a Budget
Personal Finance By the Book – Leaving an Inheritance: Three Trains of Thought
Little House in the Valley - My Name Here, Who Used to be Rich Last Sunday
Credit Card Chaser – What’s the Difference Between a 12.9% Interest Rate and a 239,238.9% Interest Rate? Nothing.
Ask Mr. Credit Card – Credit Cards for People with Bad Credit
Young and Thrifty – Vacation Report on My Trip to Nepal
Watson Inc. – Saving Down, But Spending Up. What Does it Mean?
Fiscal Geek - What Would You Do With a Cash Windfall?
Canadian Finance Blog – Fixed or Variable? Why Not Both?
The Way-Back Machine: Past Posts Of Mine You May Have Missed
From June 2009:
Does Anybody Know the Going Rate for the Tooth Fairy? – How much should a kid get from the tooth fairy for losing a tooth? Here’s how I came up with my number…
Credits and Debits
Credit: This week The Sunday Times reported on a group of British economists who urged Greece to abandon the euro and default on $350-billion in debt. According to the economists, Greece is so deep in debt the only way out is via a devaluation of their own currency to boost exports. Greece is currently running a debt-to-GDP ratio of 120%, but here is the rub: that number would only get worse if they followed the advice of those economists and returned to the drachma.
Debit: Just for the record, the US debt-to-GDP ratio was 83% in 2009 and is estimated to climb to 94% by the end of 2010.
Debit: The Greek situation highlights the main problem with the euro: it is impossible to force a unified disciplined monetary policy across such a diverse set of countries with varying cultures and social attitudes. I suspect that France and, especially, Germany will eventually get tired of paying bailout money in order to support the lavish socialist benefits and loose monetary policy of other Eurozone countries such as Spain, Ireland, Iceland, and Portugal. Once the bailouts stop, the euro will crumble.
Debit: Meanwhile, the Washington Times reports the US National Debt surpassed the $13 trillion mark. As of Tuesday it stood at $13,050,826,460,886. (And 97 cents.)
Debit: The Times noted, “At $13 trillion, that figure has risen by $2.4 trillion in about 500 days since President Obama took office, or an average of $4.9 billion a day. That’s almost three times the daily average of $1.7 billion under the previous administration.” Wake up, America.
Debit: President Obama recently appointed a fiscal commission to make recommendations to him on ways to reduce the debt. Are you kidding me? Are you absolutely freaking kidding me? (This is a great example of why government is so damn inefficient.) I didn’t realize the answer was so difficult to figure out.
Credit: I can just see the President in the Oval Office, talking to Joe Biden…
Obama: Joe, we’re spending so much money now the Fed can’t print it fast enough. Any ideas on how to stop the hemorrhaging?
Biden: What does hemorrhaging mean?
Obama: It’s a word that means – oh, never mind. So do you have any good ideas or not?
Biden: How about this? Let’s tax the bejesus out of the rich!
Obama: But we’re already doing that, Joe.
Biden: I was talkin’ about rich Canadians, sir.
Obama: Well, that settles it. You’re no help, Joe, and I can’t figure this one out either. I have no choice but to appoint a government commission consisting of 30 of my best economists. Hopefully they can tell me how to reduce the debt.
Biden: Hold on, I’ve got it! Let’s create a trillion-dollar bill – we can even put your portrait on it. That should give the Fed a month or two to catch up on their printing duties, don’t ya think?
Obama: You’re a little late.
Biden: What do you mean sir?
Obama: The Treasury is working on it; Nancy Pelosi suggested that very same idea last week. But they’re using Al Franken’s portrait instead.
Credit: Why didn’t the president just ask me how to reduce the deficit? Here’s the answer, if he’s reading: Reduce the size of the Federal government by 33%, repeal Obamacare, reduce taxes across the board. The following year, reduce the Federal government by another 33%. Repeat.
Credit: And while you’re at it, get rid of the Federal Reserve.
By the Numbers
Some more figures regarding the United States’ runaway debt problem…
$1,500,000,000,000 The expected annual budget deficit for the 2010 fiscal year, which ends Sept. 30.
10.7 The 2010 deficit as a percentage of GDP, the first time that threshold will have been reached since World War II.
9.9 The 2009 deficit as a percentage of GDP. The biggest post-war deficit before that was 6 percent in 1983.
197 The number of days it took the national debt to rise from $12 trillion to $13 trillion. That is the second shortest rise in history, bested only by a period between 2008 and 2009 resulting from the Wall Street bailouts.
$42,000 The amount of money every living US citizen would have to pay to retire the $13 trillion national debt – assuming it stopped rising.
2 The number of kids I have.
0 Under this runaway avalanche of rising debt and ever-expanding government, the total amount of hope I’ll have for my kids future and their prosperity if we don’t elect politicians who understand that we have to drastically reduce the size of our government and roll back these awful entitlements.
Letters, I Get Letters
No letters this week, but if you have a question you’d like to ask, or a comment you’d like to make regarding some of my irritating opinions, please feel free to drop me an e-mail at: Len@LenPenzo.com
I’ll feature the most interesting question or comment I get each week here on Black Coffee – assuming I get one, that is.
If you’re lucky enough to be the only question in the mail bag I’ll highlight your letter, whether it’s interesting or not. 
Other Useless News
Here are the Top 10 referring blogs (excluding aggregators) from among fellow Yakezie Challenge members over the past four weeks…
1. Canadian Finance Blog
2. Monevator
3. JoeTaxpayer
4. Financial Samurai
5. Money Help for Christians
6. Wealth Pilgrim
7. Money Funk
8. Family Balance Sheet
9. Personal Finance By the Book
10. Watson Inc.
Thank you to everyone who has taken the time to refer their readers to my little ol’ blog! 
As a reminder, if you happen to enjoy what you’re reading – or not – please feel free to follow me on Twitter. And don’t forget to subscribe to my RSS feed too!
Carnival News
This week I had articles featured at the following carnivals:
- Money Hacks Carnival at Saving Money Today (Editor’s Pick – Hooray!)
- Carnival of Personal Finance at A Gai Shan Life
Loading ...
via Email 
Len,
Thanks for the link.
Just wondering: did Major earn a Vegas trip as a panel expert?
@Joe: Nah, he’d rather stay home and lay on the couch all day. LOL
Have fun in Vegas. My son just returned from a few days at the Aria.
Thanks for the link love.
Thanks for the link love! I enjoy reading your debits and credits, too.
Thanks so much for the link love,Len! Nothin’ like some black coffee to start my day!
Thanks for the mention Len, and glad to see I’m the top Yakezie referrer!
“The Times noted, “At $13 trillion, that figure has risen by $2.4 trillion in about 500 days since President Obama took office, or an average of $4.9 billion a day. That’s almost three times the daily average of $1.7 billion under the previous administration.” Wake up, America.”
Congress just passed HR 4213 “American Jobs and Closing Loopholes Act of 2010″ which contains the never-to-be mentioned Medicare “doc fix”. It also piles $43 Billion in taxes on small business a/k/a the middle class to pay for it but who reads these things anyway?
Despite the tax increase, the CBO estimates the provisions in the bill (did I mention it extends unemployment benefits yet again?) will add $115 billion to the deficit in 2010/11.
But it includes a program to get your kid a job this summer so no worries.
“I suspect that France and, especially, Germany will eventually get tired of paying bailout money in order to support the lavish socialist benefits and loose monetary policy of other Eurozone countries such as Spain, Ireland, Iceland, and Portugal.”
The PIIGS (Portugal, Ireland, Iceland Spain) are at the trough…party on dude!
Len Penzo for President!
Seriously, where do I sign-up?
Yours is one of the few lone voices crying out in the wilderness…it’s nice to have some company
Betty
PS: Looking forward to meeting you in person.
@Tom: And I appreciate all the referrals!
@Betty: Wow, really? Wanna be my running mate? I’ll appoint Greg as Secretary of the Treasury. (And I am looking forward to meeting both of you too.)
I agree with you about the euro. I read a comment from a woman from the Netherlands who wondered why she had to work to age 67 to get a pension, while some Greeks could retire at age 50. I think the EU should have let Greece go since they have been quietly subsidizing Greece’s bad fiscal behavior for years. I suspect this handout is a bailout of the banks again.
I love your US debt reduction plan, especially that dig at the Federal Reserve! If you did what the federal government does with its budget, you’d be in jail.
Here’s another stat for you: The unfunded liabilities of Social Security and Medicare are $108.9 trillion, or more than $352,000 per US citizen according to usdebtclock.org.
I am well aware of the cost of those unfunded liabilities, Jen. I talk about them all the time in Black Coffee. It is our children who are going to be saddled with the responsibility of dealing with most of this – and that is unconscionable to me. The fate of our nation’s financial survival and our future standard of living will be determined by the direction the electorate votes this coming November. I’m keeping my fingers crossed.
Hi Len, I agree that it’s unconscionable to drop this on the kids, and their kids, and so on. Since many Americans aren’t well educated when it comes to money (as you point out) I think the average standard of living will go down. After all, a lot of people’s lifestyles are based on unsustainable debt levels.
I’m glad you are up on the unfunded liabilities.
The media does not cover them well or often enough.
Beaten by a Canadian, eh? Ah well, they’re nice people.