Good Guys To Know

OK, so here are our magic videos.  Leave a comment and let us know who you think had the best tricks! A special apology to Mitch, the video didn’t switch for the first bit of his trick. You can see him in the little video on the bottom though. Medical Marijuana content is below the videos.       History: Marijuana has been in use medically, ritualistically, and recreationally for at least 5000 years.  The first reference to medical marijuana is thought to have been an ancient pharmacopoeia used by Chinese emperor Shen-Nung in 2700 B.C.  This ancient text, which is considered to be the world’s oldest pharmacopoeia, recommends marijuana for more than 100 ailments, including gout, rheumatism, malaria, and absentmindedness, and sits among other common herbal remedies such as ginseng and ephedra.  Interestingly, it was originally used as a tea; smoking marijuana has been a relatively recent form of ingestion of the drug.  From east Asia, marijuana moved west to Persia, Syria, Egypt, Greece, and Italy between 2000 and 1500 B.C.  Here, it began to be used not only for its physiologic properties, but also in the form of hemp for clothing, rope, and paper.  Many sources actually suggest that the Declaration of Independence was written on hemp-based paper!In 1854, marijuana was included in the US dispensary for the first time.  Many of the doctors we imagine as making “house calls” carried marijuana extracts in their black bags.  The drug was especially useful for insomnia, headaches, and anorexia, though it was commonly prescribed for pain, whooping cough, asthma, and sexual dysfunction.  Fast-forward to 1999, and you’ll find a report from the institute of medicine which summarized existing peer-reviewed literature, and found that there was at least some benefit in smoking marijuana for stimulating appetite, especially in AIDS-related wasting syndrome.  It also was found to be helpful for nausea and vomiting after chemotherapy.Throughout the 20th and 21st century, the popularity of marijuana has remained consistent.  Many people smoke marijuana for its mind-altering effects, but others maintain that, despite a lack of good randomized controlled clinical trials proving its efficacy, it is an excellent “organic” alternative to many of the drugs synthesized in laboratories. Vocab: Cannabis = comes from the latin name for the common marijuana plant, of which there are 3 species; Cannabis sativa, Cannabis indica, and Cannabis ruderalis.  C. sativa is the most commonly cultivated species in the US.Cannabinoids = chemical compounds that activate receptors in the brain and in the immune system, causing euphoria, decreased pain sensation, and reducing inflammation.  There are 3 major types of cannabinoids: 1) endocannabinoids, which are produced naturally in human tissue.  2) phytocannabinoids, which are produced by plants.  3) synthetic cannabinoids, which are produced in a laboratory.   THC = short for tetrahydrocannabinol, one of the main phytocannabinoids responsible for feelings of euphoria Cannabidiol = the second of the two main phytocannabinoids – maximizes euphoria and minimizes anxiety Recreational Use Today: Marijuana is the most widely-used illicit drug in the world.  UN estimates report that at least 190 million people consumed the drug in 2007.  Most people smoke marijuana for a few reasons.  First, the drug is much more predictable this way.  The drug is absorbed very consistently through the lungs, especially when compared to the stomach.  As such, it allows for more effective titration of the drug to reach a desired effect.  Most people experience a mild euphoria, relaxation, and perceptual alterations (time distortion, intensification of ordinary experiences).  Unfortunately, some users react to the drug with anxiety and paranoia, whether they are using the drug recreationally or medically.  It is thought that unfamiliar situations can predispose to these negative effects.  The con[...]

So I think exactly a year ago, we did the Paleo challenge that was basically to eat a diet that is more in line with what our human bodies have evolved to eat. So lately I’ve been thinking about the other side of that equation; exercise, and overall health. I’m pretty sure that our bodies weren’t designed to do what I do every day and sit at a desk for 8+ hours, and I’m always skeptical when I hear things like, exercising 20 minutes a day will add 10 years to your life etc. So I got interested in thinking about life expectancy as it relates to health, and stumbled onto a cool concept called “Compression of morbidity” that I’d like to spend some time exploring today. So before we jump in and start defining this concept, we have a few terms to get our heads around that are important to understand and that I didn’t really have a firm grasp of until I started digging into this research. And I’m going to follow a paper by the guy who coined this term, James Fries, who was a Stanford professor that came up with this concept back in the 70’s. Life Expectancy - The average length of life we would expect for an infant born today. This includes absolutely as many deaths as possible statistically speaking so while it’s the one that is most talked about, it’s almost the least valuable for this discussion. It’s just a strict average, so has some of the problems that averages do. For instance, if there is a high infant mortality rate, that’s going to pull the average down. - To get around some of these problems, we can start talking about life expectancies of humans that are a certain age today? So for instance, an infant born today in the US, has a life expectancy of around 78 years. But the life expectancy for someone who is 70 today, is about 15 more years, or 85. This makes sense right, because if you make it to 75, you’ve ostensibly gotten through a lot of time without having catastrophic accidents, dying from chronic disease, etc. - So if you look at the history of life expectancy of humans, you see what we already kind of feel, that life expectancies have been going up for thousands of years. The world average in the Paleolithic era was only 33 years, and has now rocketed to 67 in 2010. But, just to emphasize why this isn’t the greatest measure of how this relates to health, in the paleolithic era, if you made it to age 15, you could expect 39 more years to 54, so that kind of cuts out some of that dramatic increase, because things have become a lot safer. Life Span - The average longevity in a society without disease or accident. So life expectancy will always be lower than life span, but can approach it as things get safer, medicine gets better, etc. - Fries spends a good portion of his paper providing arguments for how lifespan hasn’t really changed all that much over the years, and pretty much for humans, hovers right around 85 years. So if you don’t get a chronic disease early, and don’t get in a car accident or die in war, you’re probably going to live to about 85. I’m not going to waste a bunch of time providing his arguments, because I think that’s a pretty easy one to buy. Maximum Life Potential - This is the oldest age achieved by any human beings. - Oldest verified person ever was Jeanne Calment: 122 years, 164 days - Oldest person alive today: Besse Cooper: 115 Years, 169 days - The important part about this, is that there really hasn’t been any huge historical change with regards to maximum life potential over the past few centuries. It’s gone up to be sure, but nowhere near the amount that life expectancy has gone up over the years. So now that we have those terms defined, Fries begins a little to turn to policy, and how we think about age. So much of the time we think about how people are getting older, more people are living longer, etc, and that is true, but if you accept the premise that really it’s futile to try to do things to make people live longer and longer, because really our lifespan has always hovered[...]

First off, let’s show you the Rube Goldberg vids.  Keep in mind that the rules dictated that the most energy transfers (of different types) would win the challenge.  Also, only ONE human intervention was allowed to start the machine: Now onto AR.  Augmented reality is awesome.  I dare say that it is BETTER than reality…You can hear how excited I am because I’m giggling. I decided to download (almost) any and every AR app I could get on my iPhone and give a review of all of them for the listeners.  Here is the master list.  * denotes my personal  favorites…   Golfscape GPS Rangefinder Spyglass Car Finder Star Chart Stella Artois Virtual Snow *Yelp *Word Lens Geo Chaser DishPointer *Layar CVSimulator ***ARBasketball SnapShop WikiTude   Go get the free ones and try them, trust me.  You won’t really get it until you try it out!!!  

In this podcast the good guys investigate the world of sports gambling and bookmaking.  Bookmakers or bookies are market managers for sports wagering and knowing how to talk like one will definitely set you apart from the crowd the next time you discuss sports gambling!  From terminology to crazy bets to legality, we cover it all!  Now let’s go make some money!!! http://www.footballbetting.com/ http://en.wikipedia.org/wiki/Bookmaker http://entertainment.howstuffworks.com/sports-betting.htm Legal gambling in the Unites States: STATE Charitable Pari-mutuel Lotteries Commercial Indian Racetrack District of Columbia Yes No Yes No No No Alabama Yes Yes No No Yes No Alaska Yes No No No Yes No Arizona Yes Yes Yes No Yes No Arkansas Yes Yes Yes No No No California Yes Yes Yes No Yes No Colorado Yes Yes Yes Yes Yes No Connecticut Yes Yes Yes No Yes No Delaware Yes Yes Yes Yes No Yes Florida Yes Yes Yes No Yes Yes Georgia Yes No Yes No No No Hawaii No No No No No No Idaho Yes Yes Yes No Yes No Illinois Yes Yes Yes Yes No Yes Indiana Yes Yes Yes Yes No Yes Iowa Yes Yes Yes Yes Yes Yes Kansas Yes Yes Yes No Yes No Kentucky Yes Yes Yes No No Yes Louisiana Yes Yes Yes Yes Yes Yes Maine Yes Yes Yes Yes No Yes Maryland Yes Yes Yes Yes No Yes Massachusetts Yes Yes Yes No No No Michigan Yes Yes Yes Yes Yes Yes Minnesota Yes Yes Yes No Yes Yes Mississippi Yes No No Yes Yes No Missouri Yes No Yes Yes Yes No Montana Yes Yes Yes No Yes No Nebraska Yes Yes Yes No Yes No Nevada Yes Yes No Yes Yes No New Hampshire Yes Yes Yes No No No New Jersey Yes Yes Yes Yes No Yes New Mexico Yes Yes Yes No Yes Yes New York Yes Yes Yes No Yes Yes North Carolina Yes No Yes No Yes No North Dakota Yes Yes Yes No Yes No Ohio Yes Yes Yes Yes Yes Yes Oklahoma Yes Yes Yes No Yes Yes Oregon Yes Yes Yes No Yes No Pennsylvania Yes Yes Yes Yes No Yes Rhode Island Yes Yes Yes No No Yes South Carolina Yes No Yes No No No South Dakota Yes Yes Yes Yes Yes No Tennessee No No Yes No No No Texas Yes Yes Yes No No Yes Utah No No No No No No Vermont Yes No Yes No No No Virginia Yes Yes Yes No No No Washington Yes Yes Yes No Yes No West Virginia Yes Yes Yes Yes No Yes Wisconsin Yes Yes Yes No Yes No Wyoming Yes Yes No No Yes Yes

Happy New Year all. So as one nerd from work pointed out to me, the world isn’t set to end until the END of 2012, but I still thought it would be fun to take a look back at some of the crazy predictions and hypes that the media has kind of exaggerated during our lifetimes, and looked at what actually happened after these outlandish predictions were made. 1. Y2K - I realize some of our listeners hadn’t yet reached the age of reason in 1999, but Y2k was going to be the end of the world. It was all based on the fact that in the 70s when computing and software were in their infancy, disk space and memory was at such a premium, that many developers chose to represent dates with two digits instead of four. e.g. 1997 would be represented as simply 97. So people freaked out that shit would hit the fan when things clicked over from 99 to 00 in 2000. People  thought planes would be crashing because their navigation systems thought it was 1900, banking as we know it would cease to exist, and there would be overall chaos. Take a look at what the red cross recommended you should do to prepare. It’s a bit of overkill in hindsight but at the time was seen as pretty reasonable. What really happened? Not a whole lot. Some slot machines malfunctioned, and some websites displayed the wrong date. Not that big of deal. 2. Swine Flu (And other medical pandemics) In 2009, the WHO elevated H1N1 to phase 6 which meant the flu had spread worldwide. This didn’t necessarily mean that the disease was severe or would kill you, it more related to the fact that it spread to many countries. But the media ran with it anyway and we were all going to die. What really happend? Well about 14000 people worldwide died from H1N1. Which sounds like a lot until you compare it to the mortality rate of the straight up regular flu season that happens every year, were approximately 340 Million to 1 Billion people are infected, and up to 500,000 die of complications relating to the flu! 3. Environmental Catastophe So this is a pretty hot topic all the time right? I don’t even want to debate the validity of anthropomorphic climate change, but just want to think about some of the claims that were made long ago and see if the predictions actually came to fruition. So I looked at a couple claims and how the media appears to have exaggerated them a bit. - Al Gore in 2006 told Katie Couric that oceans were going to rise 20 feet by 2010 and the US, Asia, and Africa would become vast deserts if nothing was done. What actually happened? Well obviously the coast is not underwater, so clearly this didn’t come true. -I also looked at a prediction by the IPCC in 1990 that agricultural production would be significantly affected by global warming in countries that were particularly vulnerable like Brazil, China, and several African countries. In reality, many of these countries have increased agricultural production significantly, so this is a good example of how even expert scientists can be bad at predicting long term changes. 4. The Segway (coming soon) 5. Apocalypse predictions (coming soon)  

Everyone always tells me that video games are rotting my brain and that they are a waste of time.  As a world-leading rationalizer, I decided to try and prove the critics wrong. Tha main focus of this podcast was on a video game called Fold It.  I’ve logged several hours now on the game and it is pretty fun.  The premise of the game revolves around folding proteins found in  nature to try and mimic how Mother Nature would fold them.  It can be used in a host of different applications, but real world results have already been acheived in the field of AIDS research.  Check out the game at http://fold.it.  Download the game client and I’ll see you in the chatroom! Some other cool video game-esque inventions have been the Crusher (http://www.hightech-edge.com/crusher-darpa-autonomous-robot-iphone-xbox-controller/1417/) Surgeons are also getting in on the “game” and controlling robots from across the world with a joystick.  Check it out! While some may consider this a feeble attempt to cover up a debilitating addiction, I will rest easy anyway – knowing that somehow I’m probably curing AIDS.

Hey sports fans!  Time to get a handle on what is going on with the NBA lockout.  In this podcast, the GGTK interview Eric Meyer, a sports writer and expert in all things basketball about the current NBA lockout.  Find out who is at fault, what needs to happen and whether or not we will see NBA basketball anytime in the near future.  Thanks for listening! http://www.grantland.com/story/_/id/6874079/psychic-benefits-nba-lockout http://members.cox.net/lmcoon/salarycap.htm http://www.grantland.com/story/_/id/7021031/the-nets-nba-economics http://hoopshype.com/salaries.htm http://www.grantland.com/blog/the-triangle/post/_/id/9556/the-nba-lockout-timeline http://www.grantland.com/blog/the-triangle/post/_/id/9699/an-economics-professor-explains-the-nbpa-and-the-lockout http://www.grantland.com/story/_/id/7250994/business-vs-personal Check out some of Eric Meyer’s blogs at http://skydmagazine.com/author/ericmeyer/

One concept I’ve touched on with many of my pillars and “bad guy quotes” since we started the podcast a year and a half ago is “Utility.” It’s a concept that is used in economics fairly regularly but I don’t think that the average citizen has a real firm grasp on what it truly is. And after doing a bunch of research, there doesn’t even seem to be a good resource anywhere that I have found that talks about what it philosophically means. All of the economics blogs and articles I’ve read delve too quickly into how to quantify it and fun graphs and calculations. So I wanted to take a pillar and really dive deeply into what it means. I don’t even know if the way I look at it is truly the proper way to describe it, but it’s one of those concepts that is really worth thinking about because you can apply it to so many situations to make a little more sense of why things cost what they cost, and how much value we derive from things. It’s almost more of a psychological concept than economic, at least the way I see it, and can be applied to many situations that help us better understand why things are the way they are. “Utility” is the measure of satisfaction we gain from consuming something. Now a while back, Perek did a great pillar about money and how it’s an indicator of value, but there are some problems with using cost and prices to determine the value of things. One of the biggest problems is that price is a crappy way to measure our satisfaction because everyone’s preferences and what money means to people is different. A $100,000 car would give me a larger amount of satisfaction than it would for Bill Gates. A $3.00 hamburger means a lot less to me than it would for a starving kid from India. You get the picture. Taken even a step further, the satisfaction we derive from something changes even for a single person based on our circumstances. An ice cold beer provides more satisfaction for me, for instance, after I’ve just mowed the lawn on a 100 degree day, than the 9th beer I have at the end of a night of partying. So even though that beer “costs” the same in both situations, the first beer after mowing the lawn is “worth” more to me than that 9th one. The lawn beer has more “utility.” You also can’t measure satisfaction of less tangible things with money. The feeling of satisfaction I get from a sunny, crisp fall day is not something that I could easily attach a monetary value to, but it definitely still has “value.” So it’s helpful to have a concept like utility to talk about our relative satisfaction. Economists even have units that they can measure utility with, and they came up with the creative name of “Utils.” Using utils is a meaningful way to quantify these abstract concepts like a sunny day, or a cold beer. That lawn beer might be worth 100 “utils” whereas that 9th beer at the end of the night  might be worth only 5 utils to me. Heck, if that beer gives me a hangover the next morning, I might even say that it has “negative utility” and I could assign a value of -10 because it detracted from my overall sense of satisfaction and well-being. So these utils are a fun thing to play around with and economists love drawing graphs that have utility curves. I don’t like to get too crazy with trying to quantify these abstract concepts, but as an example, I could draw a beer utility curve that describes how much I value each beer as I consume them during a night. It would rise steeply at first, but with each successive beer I drink, the “Marginal Utility” of each beer gets less and less until it finally goes negative when I’ve had too much. So the fact that “at the margin” each beer is worth less to me, is the concept you might hear called “Diminishing Marginal Utility.” So that’s as deep as I care to get right now in terms of really trying to quantify it. But again, “utility” offers us a way to talk meaningfully about our preferences. Once we have a good understanding, (To use a term from my college calculus professor, “y[...]

We’ve all seen the television shows and movies where purported ghost hunters use “science” in an attempt to be the first to actually catch evidence of a ghost or other paranormal entity.  This has gained a lot of fame recently, as producers found that it made incredibly compelling “reality” TV.  TAPS and Ghost Hunters are two recent examples.  Unfortunately, both attempt to align themselves with credible scientific inquiry by using high-tech gadgetry and supposedly skeptic investigators, but inevitably fail miserably at both.  Every episode seems to begin the same way, follow the same course, and end with the all-too-familiar, “we caught some interesting phenomena, which COULD be caused by a ghost because we can’t possibly think of what else may have caused it.”Now, it should be noted that TV programming is provided for entertainment purposes, and I do believe that these shows are, at a basic level, entertaining.  I hope I don’t ruin this value for any listeners, because that’s not my intent.  I’m just going to point out a few of the flaws in their investigational techniques, because I can’t bare to see the good name of science and scientists be tossed around so easily.Ben Radford does a great job of outlining the various scientific flaws found in a typical ghost hunting expedition in an article he wrote for the skeptical inquirer in December of 2010.  He mentions the following issues:1. Assuming that no specialized knowledge or expertise is needed to effectively investigate ghosts. Since there is no certifying body or degree-granting institution in the field of paranormal investigation, anyone can be an expert.  For example, the two fellas who started TAPS and are featured in the SyFy channel’s “Ghost Hunters” are plumbers by day, but claim a lot of experience in hunting ghosts.  Great, but this doesn’t mean that they’re especially good at it.  They almost never make any solid claims at the end of their episodes.  What other area of research can you consistently work in (and be respected), without ever putting forth an actual answer to a question you’re studying? 2. Failing to consider alternative 
explanations for anomalous or 
“unexplained” phenomena. This is a huge issue for ghost hunters.  Claiming that a specific finding is “unexplained” is much different than claiming that a finding is “unexplainable”.  The first can be accurately stated by anyone who is too lazy to research the possible causes of a finding.  The second can only be accurately stated when all other possible causes have been ruled out.  Obviously, a 30-minute television show makes it difficult to ever measure a phenomenon and also make a legitimate claim that the phenomenon is unexplainable, yet they typically fail to make this distinction. 3. Considering subjective feelings 
and emotions as evidence of 
ghostly encounters. Jane’s goosebumps and John’s sudden feeling of impending doom are not, and never will be, scientific evidence of anything at all.  Enough said. 4.Using improper and unscientific investigation methods. Why are you searching for ANYTHING with the lights off?  This is an astounding, yet constant feature of ghost hunting programs. How is your EMF reader, geiger counter, infrared camera, geophone, white noise machine, ion emitter, or microphone related to ghosts?  None of these tools have ever been proven to measure the presence of ghosts, so how can you possibly use them as evidence of a ghost?  How often have you seen a ghost hunter discover an electromagnetic field, and then immediately assume that a ghost caused that fluctuation?  My first thought would be, “gee, I really have no idea how many geological or physical processes go into generating an electromagnetic field in the first place.  Maybe I should consult a geologist or a physicist.”  Nope, that never happens. Ok, so you’ve recorded an EVP (electronic voice phenomenon….duh), is running around with a microphone and listening to the recording later really the best idea f[...]

Don’t.  Fall.  Asleep.  Zombies are coming and they are going to take over the world.  Unless of course you are prepared.  Well…Prepare to be prepared. Here are a few Zombie Apocalypse survival resources.  This first one is from the CDC so you know that i’s legit. http://www.bt.cdc.gov/socialmedia/zombies_blog.asp Wanna know the best ways to kill a zombie?  GO HERE NOW            

The landing of the space shuttle Atlantis on July 21st 2011 marked the end of the Space Shuttle program for the U.S.  In this podcast, the good guys discuss why this happened and what this really means to the future of space exploration.  Puff steps up bigtime in the first challenge of the new season and also proposes a somber but significant new challenge (see links below).  Thanks for listening! http://arstechnica.com/science/news/2011/07/30-years-of-manned-space-flight-the-last-flight-of-the-space-shuttle.ars/2   Astronaut Bruce McCandless II flying hundreds of meters from Challenger with the MMU (manned maneuvering unit) Photo from Arstechnica.com: http://boingboing.net/2007/07/25/top-ten-spacewalks.html How much does the space program cost us? http://en.wikipedia.org/wiki/Budget_of_NASA What are we going to do next? http://www.pcworld.com/article/227921/the_shuttle_program_is_winding_downwhat_next.html   http://mashable.com/2011/09/23/nasa-space-exploration-plans/   NEW CHALLENGE LINKS! Advanced Directive Questions/info:  http://www.putitinwriting.org/putitinwriting_app/index.jsp State Specific:  http://www.caringinfo.org/i4a/pages/index.cfm?pageid=3289

Well it’s been a heck of a year, listeners.  For our anniversary podcast, the Good Guys decided to do an episode that has been highly requested and long awaited.  BEER! And in true Good Guys fashion we went one step further and brewed our own batch.  We invite one of our dedicated listeners on the show to teach us about beer and critique the Good Guys Ale. Geo dug into the numbers to see who won the most challenges, which episode was listened to the most, and other awesome statistics. A big thanks to all our listeners!  Without you this would be a weird thing for 4 dudes to be doing…   Let us know what you think!  Comments go at the bottom.

As many listeners may remember, I (Perek) have had a huge amount of pent up demand for wireless electricity for about a decade now. Thanks to a recent e-mail from Chad, I decided now was a perfect time to unleash the magic. As it turns out, we are advancing more and more each day with this technology, and to my surprise, it has already been implemented in consumer products! There is a lot of science and math behind the actual technology, but we’ll leave that to the big n3rds. Below are some resources that were referenced in the podcast this week. I’ll leave it to the MIT grad students to explain it. A Good Guy to Know knows when to defer explanations…Thanks for listening! By far my favorite technology. IMHO, this is the one that’s going to make it to our homes soon! http://web.mit.edu/newsoffice/2007/wireless-0607.html Here are some various articles about the general technology. They reference the MIT group and some others. http://articles.cnn.com/2009-09-02/tech/wireless.electricity_1_electricity-low-power-wireless?_s=PM:TECH http://www.popsci.com/scitech/article/2008-01/electricity-air http://www.fastcompany.com/magazine/132/brilliant.html Let’s put down on paper (HTML) our iPhone wireless charging estimates (put forth in the recording): Perek – iPhone 6 Mitch – iPhone 10 Chad – iPhone 8 Geo – iPhone 15 Hey Look!  Our first correction!  Meredith from one of the technologies discussed in the podcast was upset with my description of her technology and credentials.  Below is her profile from her website directly.  I said she was a bio major, but in reality, she was a paleobiology major – and now is a researcher in astrobiology. Meredith graduated from the University of Pennsylvania in May, 2011 with a degree in paleobiology. She is a NASA astrobiology researcher and NASA student ambassador. I also made an implication that they had resources available to buy their technology which is false.  They apparently had no money for anything, and won 5 grand in an invention contest.  I encourage anyone who wants to know more to check them out online.  The link should be somewhere out there on the web.  Thanks for trolling! Best of luck to the company.      

A good guy to know knows the basics about some of the terms politicians have been throwing around lately, even if you don’t have a strong opinion one way or another. What is government debt: At the most basic level, governments take in money, and then spend it on programs/people. So they take tax dollars from businesses and individuals, and then congress decides how to spend it. So you’ve got money coming in, and stuff you want to spend it on. When the stuff we decide to spend it on, ends up being more than we take in taxes, you have a “deficit.” This is the annual difference between what we spend and what we take in. So the deficit is the annual amount that we are “short.” If you have a bunch of years of deficits, you wind up adding to the national debt. So instead of putting that ‘deficit’ on a credit card, governments can “issue debt” which is basically the same thing. They get others to give them money, and promise to pay them back at some interest rate. Here’s how the numbers look today: US income -$2,400,000,000,000 Federal budget -$3,600,000,000,000 New debt – $1,200,000,000,000 National debt – $14,200,000,000,000 Recent budget cut – $38,500,000,000 Let’s take off 8 zeros and make this the Jones family: Household income -$24,000 Jones’ spent last year -$36,000 Jones’ added to their credit card debt -$12,000 Total credit card debt of the Jones family -$142,000 After sitting around the kitchen table, grinding for weeks on what to cut from their spending – $385 So in this example, everytime you hear “Trillion”, think of it as $10000 for the jones’ Every time you hear “billion” – think of it as $10 for the jones’s. Who buys this debt? Internal Debt – any debt that is owed to lenders within the country 60% Individuals – savings bonds, college endowments, other institutions, Social security, Military retirement fund, etc. External Debt – any debt that is owed to foreign lenders 40% China – 7.5% Japan – 6.4% UK – 3.4% All others – 11.6% What is a ratings Agency An organization that gives an opinion of the credit trustworthiness (ability to pay back the loan) and assigns a rating. Just like a credit score individuals, they give a grade to companies/non-profits – and most important to our conversation; governments. ‘AAA’—Extremely strong capacity to meet financial commitments. Highest Rating. ‘AA’—Very strong capacity to meet financial commitments. ‘A’—Strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions and changes in circumstances. ‘BBB’—Adequate capacity to meet financial commitments, but more subject to adverse economic conditions. ‘BBB-‘—Considered lowest investment grade by market participants. ‘BB+’—Considered highest speculative grade by market participants. ‘BB’—Less vulnerable in the near-term but faces major ongoing uncertainties to adverse business, financial and economic conditions. ‘B’—More vulnerable to adverse business, financial and economic conditions but currently has the capacity to meet financial commitments. ‘CCC’—Currently vulnerable and dependent on favorable business, financial and economic conditions to meet financial commitments. ‘CC’—Currently highly vulnerable. ‘C’—Currently highly vulnerable obligations and other defined circumstances. ‘D’—Payment default on financial commitments. So all of that brings us to today. Where one of the main three credit ratings agencies has downgraded the US’s ability to make its payments from AAA to AA+. Why did they make this decision? Kind of a hotly contested topic, but basically they thought that the US no longer looks like as safe a risk as it has in the past. It’s almost more of a political statement than based on hard facts. “Since we revised the outlook on our ‘AAA’ long-term rating to negative from stable on April 18, 2011, the political debate about the U.S.’ fiscal stance and the related issue of the U.S. government debt ceiling has, in our view, only bec[...]