Friday, April 3, 2009

Socialism Lite

As we seem to be progressing toward European Democracy or “socialism lite” I have to wonder if US citizens have considered the overall standard of living in Europe. The European model is based on status vs. mobility.

In particular, based on news articles I have read:

1. I saw a comment that the overall standard of living was 30% lower than in the US ( see 3. and 4. Below).

2. Unemployment seems to average 2-3% above the US.

3. The cost of housing in Europe is relatively higher, percentage of home ownership lower and average dwelling unit size smaller.

4. I would guess, due to the cost of fuel and 1. Above, the typical European family has a small car and scooter (Fiat and a Vespa) as compared to the US desire for a family sedan and an SUV (Toyota Camry and Chevy Tahoe). GM thinks they have problems now!

5. Higher educational programs are more limited and expensive. Even in these difficult times the community college/state college and state university system in many of our states provides tremendous opportunity at very reasonable costs.

6. The role of ethnic minorities in business and government I suspect is far more limited.

As we embark on dramatic changes to our economy and social fabric, I thought it would be interesting to track the large numbers we toss about these days.

BIG NUMBERS

M = Millions

B = Billions

T = Trillions (million X million)

FEDERAL GOVERNMENT

2009 stimulus package $ 787B

Federal spending in FY2009: 4+T, 28.5% of GDP, highest level since WWII

Federal deficit: 2008 - $459B; 2009 - $1.845T

Federal revenues $2.5T in 2007, 18.8% of GDP

FY2010 Federal budget sent by White House $ 3.6T

Federal debt outstanding $11T (Mar 2009)

Interest on federal debt $412B per year

TAXES

Gross tax gap: taxes owed vs. paid $ 345B; estimate collectible $100B

Total income taxes $2.1T

Individual incomes taxes $1.1T (2006)

Paid by top 5% - $616B (Earn over $153k)

AUTOMOBILES

Loans to date to GM & Chrysler: $17.4B

Cars produced in US: 10M for 2009 vs. peak of 16M

US ECONOMY

Gross Domestic Product: 2009 - $14T

Value of US commercial real estate $ 6.5T; related mortgage debt $3.1T

Consumer home equity loans $1.1T; default rate 3% prox

ENERGY

Cost of President’s cap and trade program – $646B over 10 years

Cost per family of four - $4,500 per year

RECESSION

Loss of value from stock prices and home values - $12T

Effect on consumer spending - $600B

Unemployment rate 8.1%

Number unemployed – 5.7M

Last major recession: 1982 – unemployment 12.5%