Now there are less than 3 days left before debt ceiling collapse time. I am still waiting to see what the idiotic politicians are going to do. In the mean time I will write what I think of economics and how it relates to our situation right now. This is not a scientific paper and I have nothing to back up my thoughts. So feel free to tear it apart.

First of all I think that it is strange that we say that we make money when we go to work or invest. I mean none of us, except those who work at the mint actually make any money. We just get money from other people for doing work, sell a product or "let our money work for us, whatever that means". So basically money just exchange hands and if money never exchange hands, we never would "make" any money. So in order just to keep the standard of living the same, more money have to printed all the time because the population is always going up and those new babies are going to need money soon! Money is going to be destroyed or lost by wear and tear so more have to be printed. So it seems to me the government will always run a deficit even if the amount of taxes brought in cancels the amount the government pays out.

Now I assume that the "deficit" we have been talking about is only about paying out more than taxes taken in as opposed to printing money due to expanding population etc. But how come we can print more money than say Greece which is in more debt than us? There are many reasons economists give to explain why Greece cannot recover on its own. But the bottom line to me is that the rest of the world trust the U.S. economy and U.S. government. In other words the world thinks that the U.S. still have the best private companies and the most stable government (and the most powerful military). So will this change? Yes, it can but not for many years in the future. This won't change now regardless whether we default on Aug. 2nd. They will still buy U.S. bonds and the dollar will still be the currency of exchange in most of the world.

This does not mean, of course, that the debt is not important. Twenty or thirty years down the line at the rate we are going we could lose our #1 position. If we just raise the debt ceiling and start working for long term solutions we would be fine. We are hurting ourselves by giving ourselves a no confidence vote. Take Moody and other rating services. These people should be put in jail. They missed lowering the ratings of financial firms in 2008 which caused investors and American people billions of dollars and now they have the nerve to threaten to lower the rating of the U.S. bonds? Look, there are no companies and countries in the world that are safer than the U.S. right now because if the U.S. disappears there would be nothing left in the world anyway so how can the U.S. be lower than the highest grade?

The stock market has dropped the last few days. This is due to uncertainty of what may happen. If the world truly has lost confidence in the U.S. the stock market would have dropped much more. Yes, we have to deal with our deficit but this whole charade in Washington right now is doing nothing except show the rest of the world that WE have less confidence in ourselves. The government spending that gets the Tea Party people most upset are entitlements and government salaries and pensions. Yes, these need to be fixed but they are not the reason the economy went downhill in the past few years. No new entitlements have been added recently except Medicare prescription drug program put in by Republicans. Government employment and pensions have not gone up either. The real culprits are the lack of oversight of Wall Street and financial institutions and the 2 wars. Entitlements and government salaries and pensions are like small cuts that would eventually kill us but will take a long time whereas the financial criminal actions are like stabs to our chest that will kill us faster. Now this lack of confidence in ourselves by not raising the debt ceiling, while will not be fatal, will be another stab to the chest. So the Tea party, in trying to stop small cuts, are really putting a larger wound into our body.

OK enough ranting for now. We will see if Washington comes up with anything in the next 2 days. So I will probably write something in the next couple of days. It will likely be more ranting.

Obviously the blog about the debt ceiling is inevitable. But this whole thing sickens me so much that I find it hard to write about it. Eventually before Aug 2 I will have my say. You are right about the interviews which do not change anyone's mind. Everybody who has been thinking about this issue already has formed an opinion that is unchangeable. So I am just going to wait to see what happens first before putting in my 2 cents worth.

On to lighter things first. Apparently Mr. Costanza, former assistant to the traveling secretary of the Yankees, wrote in about uniforms. I don't know if he is right about cotton and polyesters but I think here in LA the Dodgers can't afford either. I suggest that they wear the uniforms of Australian rule football players. I am sure they cost less and my wife thinks that they are sexy. I think in LA here they will attract more female and gay male fans to Dodger stadium and thus reduce McCourt's deficit.

Speaking of gay, regardless of what your position on gay marriage is, you must admit that allowing gays to marry as they do in New York now will be a stimulus to the economy. I saw pictures of gay men in tuxedos and women in white brides dresses. This will help the clothing business. Now many of these newlyweds will throw a wedding party so that helps the food industry, hotels and flower shops. After they wed they are more likely to have children since they would not be illegitimate now and so that will boost the adoption business along with fertility clinics, egg and sperm donors, OB-Gyn doctors and surrogates. Being married, these people will have nagging spouses which will lead to anxiety and depression and thus more business for psychiatrists and drug companies. But the biggest industry boost will be the lawyers. Prenuptials will have to be written, wills designating spouses and children as beneficiaries will be drawn up. And if gays are like us heterosexuals, 50% will need divorce attorneys. So as you can see the economic stimuli are tremendous. I think the other 44 states better allow gay marriages before all these businesses end up in other states!

Japan's victory in the women's World Cup final was welcoming to everyone in the world other than U.S. fans. Given the bad year Japan has had, this should boost the country's spirit. This game was almost the reverse of the U.S.-Brazil game with the team that fell behind in overtime coming back with a dramatic late goal to tie and then win in pk. The U.S. team gave a good account of themselves and with a little better luck yesterday, would be 3 times champions.

Japan's victory I think support my theory about the rigid system in China will not produce teams that can compete as well as they are capable of. Sure, China almost won the Cup in 1999. But for the first 10 years of world competition for women, only the U.S., Norway, Sweden, Germany and China were good teams. With the sport institute system, China was able to jump ahead most countries that did not have much of women soccer history. This includes Japan. But while rest of the world have improved a great deal, (I think this U.S. team would have beaten the great U.S. teams of the 90's.), China is still stuck with the training and skills of the 90's. Think back to when the USSR and East Germany were dominating Olympic individual sports, they could not beat the top western European and South American teams. China has more talent than Japan. But with freedom to train and explore different styles, it is the Japanese who are the world champions today.

I felt sad when I heard the news of Yao Ming's retirement. I followed Yao's career with great interest because he is the first Chinese athletic star in a mainstream sport in the U.S. Even though he did not have much of a formal education, he had a great understanding of the world and was very funny during interviews. My favorite was when they interviewed him before the Bejing Olympics in the Chinese team's locker room. It was obvious that in order to advance into the second round the Chinese team had to beat Germany. Right before the Games, Chris Kaman, who has German blood from about 3 generations ago, joined the German team. Yao was asked if this frightened him. Yao, with a serious expression, said that he will personally take care of Kaman so there is nothing to worry about. Then turning to his teammates, he then asked: "Now would someone else take care of Dirk Nowitzki?" This cracked up the reporters and also his teammates. Well, maybe his teammates had a nervous laugh.

Yao's coming to America was taken by some as the beginning of the invasion of players from China. It didn't turn out that way as Yi Jilian and Sun Yue had not played well in the NBA. So the question is, can China ever catch up in the major sports. My answer is no, if they continue their methods of selecting and training elite athletes. By looking for youngsters with the "right" size, strength, speed and flexibility for various sports and then train them in a very strict manner, China will continue to produce world class athletes in sports like gymnastics and diving. But this method does not work for team sports where someone is defending against what you are doing and you must defend against what they are doing. China tends to try to match westerners in size in sports like soccer and basketball. The smaller players are overlooked and are not given the training. Since there is no AYSO and youth basketball leagues in most of China, unless you are big at a young age, you will be forgotten. I think if properly trained there would be players similar in size of say Allen Iverson and Diego Maradona who can be better than people on China's current soccer and basketball national teams. Sports like basketball and soccer also require individual imagination that cannot be taught at a sports institute that has rigid training methods. Playing in the playgrounds like Americans would actually be better. Yi, who has the height, quickness, jumping ability and shooting touch, should be much better in the NBA. He looks lost out there. I think if he had grown up in New York, LA or Detroit he would be a dominant player in the NBA.

Yao is owner of the Shanghai Sharks of the CBA. I hope that he will use his knowledge learned in the NBA to improve basketball in China. He also wants to go back to school and get a formal education. You think he maybe a popular pick in intramural basketball? After he gets his education, I hope he fulfills the prediction I made a few years ago on this blog: Yao becoming a great politician>

An independent commission of citizens in California recently redrew districts for the state assembly, state senate and House of Representatives. This commission was formed following a law passed by the voters to take away the power of forming political districts from politicians. This ensured that there is no gerrymandering in order to keep as many incumbents in "safe" districts as possible. I think this is a good progress to get more centrists and less extremists into political office. After redistricting was announced, the magazine The Economists analyzed the result and find that more districts are going to be competitive in the next election in California. For example, for the 53 Congressional districts, 9 are now deemed competitive compared to 4 before. This does not sound like much but it is a step in the right direction. This is an idea that should be followed by other states.

Another thing we should consider is to get rid of the electoral college. States like Wyoming and Alaska should not get 3 electoral votes. This does not fit the idea of one man one vote democracy. Also the American citizens of D.C. and Puerto Rico are shut out of the process. It is time to amend the Constitution and get rid of the electoral college.