Friday, October 13, 2006

Economics 101

The national debt is falling faster than predicted.
This is good.
Even so, the liberals are whining about the horrible debt in our national budget.
According to the CIA (yea THAT CIA) the Gross Domestic Product of the United States in 2005 was $11,750,000,000,000.
That would be eleven TRILLION seven hundred and fifty billion dollars.
GDP is the total value of all businesses, products, services, and individual incomes and possessions in a given year.
The national debt is now down to $250, 000,000,000.
That would be two hundred and fifty billion dollars.
If that all sounds like a lot of money – it is a lot of money.
But the national debt amounts to only 2.5 percent of the GDP.
Is your debt level less than 2.5 percent of your annual income?
I didn’t think so.
My debt is lower than most and is about 250 percent of my annual income.
So the national debt level isn’t so bad.
So the liberals need to quit whining about the national debt level.

In another part of the study from the CIA, 75 % of income growth in the US took place in the top 20% of incomes.
This doesn’t sound good but there may be an explanation.
Why?
The flood of cheap, unskilled labor will depress wage rates in the lowest levels of the income scale.
Its the supply and demand deal again.
With an extra 5 million to 10 million uneducated, unskilled illegal immigrants (read: trespassers) in the US workforce, there is an abundant supply of workers willing to work for whatever wage they can get.
That big group of workers drags down the average wage for all workers in the bottom end of the wage spectrum.

Class dismissed.

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