Can you put S&P downgrade in perspective by comparing what rating they would give the US government if our country were rated as a corporation? Jeff
Dear Jeff: Our securities would be junk grade, according to Anthony Sanders, an economist and Mercatus scholar at George Mason University.
S&P downgraded the US Treasury debt because our debt and spending have been growing at astronomic rates, says Sanders. Worse, debt is growing at a time when the economy is expanding by less than people thought it would.
“When you look at our Medicaid, Medicare and Social Security entitlements, they are about 450 percent of current GDP. So what S&P did was perfectly reasonable,” says Sanders.
The US, of course, can print all the money it wants to pay its bills. So that’s why the rating isn’t lower.
The trouble is, the more money a country prints, the less people trust that currency. The phrase “it isn’t worth the paper it’s printed on” comes to mind.
Dear John: In last week’s column, J.P. brought up the issue that the federal government owns something like 650 million acres of land in our country — about 30 percent of the nation!
The percentage of each state’s territory of which the US government is landowner is amazing: Nevada (84.5 percent), Alaska (69.1 percent ), Utah (57.4 percent), Oregon (53.1 percent), Idaho (50.2 percent), Arizona (48.1 percent), California (45.3 percent), Wyoming (42.3 percent), New Mexico (41.8 percent), Colorado (36.6 percent) — and it goes on.
The Eastern states’ percentage is less than that of the West, yet the Fed still owns about 3 percent of each of them.
If the president does call you regarding the national debt, you might want to consider advising him about selling some of this land. T.K.
Dear T.K. OK, when the president calls I’ll suggest that he call a realtor and get rid of some of the land. It must be a pain to mow anyway.
Dear John: I am watching the morning news, and they are reporting that retail sales are down. One of the reasons given is that gasoline is so expensive.
My question: Isn’t gasoline reported in retail sale figures? If the answer is yes, then shouldn’t retail sales be up? Or has the price of gasoline reduced spending overall? C.F.
Dear C.F. First answer: Don’t watch TV for your economic news. Second answer: Most of the government reports and many of those coming from places like credit-card companies include gasoline. So telling you that sales are up or down is really irrelevant. What you really need to know is whether higher sales were caused simply because people are being charged more to fill their cars.
If that’s the case, then — of course — an improvement in sales isn’t a good thing. It’s simply inflation on an item that people can’t do without.
Sales figures from retailers, however, wouldn’t include retail sales. Except for some Sam’s Club stores, I don’t know of a retail outlet — think Target, JC Penney or Sears — that would count gasoline in their monthly numbers.
Send your questions to Dear John, The N.Y. Post, 1211 Ave. of the Americas, N.Y., N.Y., 10036, or john.crudele@nypost.com.
