Adam Smith coined the “Invisible Hand” metaphor over 200 years ago and how applicable it is during these trying times.  The “Hand” is at work and there’s nothing we can do to stop it; a reckoning is coming, one that even the vaunted federal government cannot stop, though it will try.

The Mother Of All Bubbles (MOAB) is upon us and ignoring or tinkering with it will only prolong, not solve this mess.

With over 12 TRILLION in current debt, another 7.5 TRILLION coming in 2009-2010 from bailout after bailout and 60 TRILLION in unfunded mandate obligations (Social Security and Medicare), the die is cast.  Now we just wait and see how this drama unfolds and how big a mess we’ll be in.  There is no blueprint and we’re in unchartered waters.

We American’s are an odd bunch with the uncanny ability to bury our heads in the sand and rely on some sort of cognitive dissonance to navigate difficult times.  On the one hand, we see the problems in the country and complain.  Oddly, at the same time, we act as though the problems aren’t real and go our merry way, spending and charging.  Rather than deal with the likelihood of a decreased standard of living, severe joblessness, and staggering financial loss, 63 million of us bought into “change” rhetoric.  Sadly, these naïve ones believe that the federal government will ride in on a horse and save the day…how sad.

Here’s the cold hard truth, the MOAB is unstoppable and its name is insidious – DEBT.  We’re a country that’s full of it.

Facts:

1.      Current National Debt – In excess of $12,000,000,000,000.00 (Yes, that’s 14 digits)

2.      Projected bailouts – In excess of $7,500,000,000,000.00

3.      Unfunded debt obligations (Social Security & Medicare) - $60,000,000,000,000.00

4.      Consumer Debt – 97% of GDP or roughly $14,000,000,000,000.00

MOAB (Mother Of All Bubbles)

What does all this mean?  In layman’s terms, GDP essentially equals how much is produced by our country each year.  In 2009, it will generally equal $14 TRILLION.  So, if the entire country didn’t spend a single penny all year (that means no mortgage payments, no food, electric, car payments, etc), we would still fall $79 TRILLION short of the debt we owe.  Of course, we cannot use all of our GDP to retire debt and really, we’re $93.5 TRILLION in debt.

Thus, the Mother Of All Bubbles is upon us and we cannot hide.  It’s a simple reality that we face and we’d better come to terms with it.  For starters, we’d better realize the government isn’t the solution.

The Economy