Let’s suppose you make $100,000 per year and your credit card debt is $150,000.  This is what is happening in many countries, USA included.  On top of that in this example you are spending $125,000 per year including debt service.  Now suppose I make you a loan to cover your payments for the next year.  Have I solved your debt problem?

Now you not only owe $150,000 but you owe the money I lent you.  In short, this is where many countries find themselves.  The problem is exacerbated by the fact that they can’t just stop spending because their obligations and current outflows can’t just be turned off like that.  Take Greece for example where the government is the largest employer and the average government worker makes three times what a corporate employee makes.  If they could lay off 50 percent of the employees consider the unemployment problem and rioting that would ensue.  On top of that Greeks don’t pay income tax.  They are supposed to, but very few do and the government doesn’t try to enforce tax laws.  So, do you want to lend money to someone in this situation?  Yet, the European community finds itself between insolvency and crushing debt.  What can they do?

Here in the USA we are not that much different.  You know the story of “entitlement” programs, debt load and the rest.  So what can you do about it?  Probably not much unless you are in a position to quit your job and spend all your time fighting with Congress to do their duty and manage us out of the nearly $2 trillion debt problem.

All you can do is work to make your company as profitable as possible so that you keep your job.  Layoffs are ramping up again led by so-called blue chip companies like Bank of America and Hewlett Packard.  So, just what can you do to make your company more profitable?  The answer is obvious.  Work to make your associates more productive and better servers of customers.  How can you do this?  Look back at the blogs I’ve posted in the last month.

More ideas next week.

Jac

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