Economic Meltdown

I've been watching and reading reports on the current (October 10, 2008) economic meltdown. I have a question to ask.

When are they going to start talking about the elephant in the living room? That is, the Federal budget deficit. According the the treasury (http://www.treasurydirect.gov/govt/reports/pd/histdebt/ histdebt_histo5.htm), the current budget deficit is $1,017,071,524,650.01, that is, slightly more than one trillion dollars.

There has been some reporting of the fact that the budget deficit has gotten so big that the sign in New York City has to be replaced, but but it was reported as a human interest story. That is, "Oh, the debt sign in New York City had to be replaced. And Freddy has a really interesting relationship with his mother."

The current population of the United States is 305,392,783 according to the census bureau (http://factfinder.census.gov/home/saff/main.html). Therefore, the budget deficit is $3,330,37 for every man, woman, and child in the United States. That is, $13,321.48 for a family of four.

Yet, the economist have the gall to blame those people who want to save a bit of money on their mortgage. If we assume this family of four bought a $200,000 house for an interest rate that was 1? below prime, they saved $2,000 per year. Compare that with $13,321.48 additional debt that the government mandated they take on. That is in addition to the $117,981.23 debt that the government has already mandated they take on.

Since the money the government borrows has to come out of the credit market, I can ask the obvious question: Which hurt the credit market more, the $200,000 borrowed to buy the house, or the $131,302.71 the government required them to borrow?

I think the latter, since not everyone bought that $200,000 house, but everyone was required to borrow the $131,302.71 under penalty of law.

This is why the stupid Wall Street bailout won't work. The mice in the pantry are being rounded up, and fed to the elephant in the living room. That is, $700,000,000,000 is being used to increase the enforced debt in order to bail out the wall street firms that loaned out $200,000 for the house. I've not seen any proposal yet to bail out the people who wanted to bring their children up in a house.

In a sense it is somewhat silly. Congress has been hoodwinked into believing they can take $700,000,000,000 out of the credit market to prop the credit market up. Like the man who wants to dig a hole in th ocean.

Therefore, I have a rather novel idea. Why not pay off some of that $10,000,000,000,000 in debt to prop up the credit market.

PS: Yesterday (October 12, 2008): In this article, I asked the question, "When are they going to start talking about the elephant in the living room?" On a program GPS on CNN the elephant was acknowledged. George Soros acknowledged that this financial crisis is due to the subprime problem was actually a small problem that ignited a much larger problem - the elephant I mentioned above. This was followed by a panel which included Fred Bergsten, Jeffrey Sachs, and Sebastian Mallaby. Statements were made such as, "Reaganomics is over." "The rich are going to have to pay taxes again." "McCain's idea that we were going to have more tax cuts is surreal."