Saturday, May 14, 2011

Quanitative Easing in the Dunnevant House

Our nation is currently running a 1.6 trillion dollar annual account deficit. That means we are spending 1.6 trillion dollars more than we are bringing in to the treasury. To fund this shortfall the Federal Reserve sells U.S. treasury notes. 30% of these notes are bought by people and other countries and 70% are bought by the Federal Reserve itself. This is called “quantitative easing”. If my math is correct that means that each week our government spends 31 billion dollars that it doesn’t have, 21 billion of which it borrows…from itself. This is what passes for monetary policy in 2011. I wonder how “quantitative easing” would work in the Dunnevant household? Hmmm…

Me: Hey sweetie. Whatsya doing?

Pam: Oh..just took Molly for a walk and in so doing I created or saved 250 calories!

Me: Awesome! Guess what?! I just got the new Down East magazine in the mail and look at this incredible lake house! Its on Lake Megonticook, only 5 miles from Camden and the price was just slashed to $850,000.

Pam: Honey that’s great but this is probably not a good time to be buying a lake house what with you losing your job and all.

Me: That’s just a temporary setback sweetie. Heck, we’re Americans and we can do anything when we set our minds to. Just think of all of the enjoyment we will get out of this place for years to come. Not to mention the boost this will give to the economy up in Camden.

Pam: Well, when you put it that way, how can we not invest in our future enjoyment and overall standard of living? Who are we to withhold economic benefits from the fine people in Maine. I’m sold! But what about the money?

Me: I will call the bank and work out a bipartisan compromise that will raise our debt ceiling.

Pam: I don’t think that’s a very good idea, honey. One of their rude employees called the other day complaining because we were late on all of our payments. They said something about we were spending much more than we were making each month and that if we didn’t stop soon they were going to be really mad.

Me: HaHa!! Crazy right? Don’t they realize what good things we are doing here?! I’ve created or saved countless jobs over at the Cadillac dealer and Home Depot, not to mention all the financial stimulus that you have provided to Panera and New York and Company.

Pam: True dear…but maybe they do have a point. Are you sure that withdrawing all of the money from our retirement plan last month to pay for our 30th wedding anniversary cruise around the world was the right thing to do?

Me: You silly goose…of course it was!! That’s in our future and we must never hesitate to invest in our future. Think of all of the wonderful memories we’ll create or save on that trip.

Pam: Good point love. Besides, I suppose if the bills pile up too high there will always be Kaitlin and Patrick there to take care of it all after we’re gone.

Me: Exactly! And I’m sure they won’t mind at all. A small price to pay for the wonderful life we gave them. I’m hungry! What do you say we go over to the Melting Pot for a ridiculously expensive six course meal? Take a quick shower while I call MasterCard to inform them that I’m arbitrarily raising my credit limit.