How Much Do We Owe?!

How Much Do We Owe?

Test Your Presidential Smarts

In Case You Missed It


A few months ago, I wrote about the movie "I.O.U.S.A." and the United States' enormous national debt. That was before the government rescued AIG for $85 billion and before the $700 billion government bailout plan passed Congress, part of which is being used to inject $250 billion into banks in exchange for equity.

After seeing "I.O.U.S.A.," which focuses on the national and personal debt in the U.S., I was worried, to say the least. When I wrote about the U.S. debt after seeing the movie on August 21, it was at a whopping $9,618,734,657,724.09, according to the Treasury Department, which has a nifty little Debt to the Penny feature on its Web site.

The filmmakers estimated that the national debt would reach the $10 trillion mark by January 2009. Unfortunately, no crystal ball could predict that in the next two months the financial landscape of the U.S. would be drastically altered.

The national debt has reached $10,523,955,355,856.66 as of October 24, an increase of 9% in about two months. These numbers are nearly too large for the mind to comprehend. To break it down, it means that if every American had to re-pay this debt, each person would owe $35,079.85. And if the debt were just to be re-paid by Americans over age 18, each one would owe $46,773.13.

I don't know about you, but I certainly don't want to be on the hook for $46,773.13, or even $35,079.85, to the federal government. I still have mixed feelings about the bailout, as it didn't stem investors' panic in the short term. But I'll try to have a little patience as we wait to see what the future brings. The housing bubble and credit crisis weren't formed overnight and I don't expect them to go away that quickly either.

But I do believe we need to demand more fiscal responsibility from our government, something with which it has had a difficult time. Even before the economic crisis, the U.S. government was piling up debt like it was Monopoly money. And now, the buck will get passed to whomever is elected on November 4.

To the next president, I would say this: Get the financial system back on track by setting an example for the American people. Instead of spending more than you have, live within your means, save money for a rainy day and invest in the future.

Nearly every presidential candidate says he is going to reduce spending and balance the budget, and some have done better than others once elected, but now, perhaps more than ever, we need the government to get spending under control. The country has hit a critical mass of debt.

Obviously, we can't just shut down the government to get the debt under control or cut programs that are vital to the country's operations, but someday these bills are going to come due. Someday it will be time to pay the piper.

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On a more light-hearted note, every Thursday at Cabot we play a game for a half an hour to foster competition and take a break from the workday. This week, it was my turn to make the game and I came up with a presidential quiz in honor of Tuesday's election. Here are some interesting facts I discovered while doing research that you can wow your friends and family with while watching the returns on Tuesday.

James Buchanan was the only bachelor president.

Franklin D. Roosevelt was related to 11 other presidents either by blood or marriage. He was also the first president to appear on television.

Four presidents have been assassinated, Abraham Lincoln, James A. Garfield, William McKinley and John F. Kennedy.

Gerald Ford was the only person ever to become president without having been elected. This happened after Ford became vice president when Spiro Agnew resigned and then president after Richard Nixon resigned during the Watergate scandal.

Grover Cleveland was the only president elected to two nonconsecutive terms.

William Harrison served the shortest time as president. He died about a month after becoming president and was the first president to die in office. Harrison was the oldest elected president until Ronald Reagan took office in 1980 at the age of 69. John McCain would take the title of oldest elected president from Reagan if elected.

The smallest President was James Madison, who stood 5 feet, 4 inches tall and weighed less than 100 pounds.

The tallest President was Abraham Lincoln, who stood 6 feet, 4 inches tall.

The heaviest President was William Howard Taft, who sometimes tipped the scales at more than 300 pounds during his tenure. After he became stuck in the White House bathtub, Taft ordered a new one installed. The replacement was big enough to hold four grown men of average size.

The youngest elected president was John F. Kennedy, who reached the White House at 43. But the youngest president to ever serve was Theodore Roosevelt, who was elected vice president on a ticket with President William McKinley. In September 1901 McKinley was killed and Roosevelt assumed the top office at 42.

Virginia is the birthplace of the greatest number of Presidents. It boasts eight. Thirty-one states have never claimed a native son as President.

Teddy Roosevelt was the first president to travel abroad while in office; he visited the Panama Canal in 1906.

Richard Nixon was the first president to visit all 50 states.

Bill Clinton set a record for the most trips abroad: 133.

I hope you enjoyed the presidential trivia!

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Buffett went on to say, "Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497."

Cabot Benjamin Graham Value Letter follows the system laid out by the father of value investing, who taught the system directly to Buffet when he was Graham's student at Columbia University. Click the link below to start investing like the Oracle of Omaha.


In case you didn't get a chance to read all the issues of Cabot Wealth Advisory this week and want to catch up on any investing and stock tips you might have missed, we have links below to each issue.

Cabot Wealth Advisory 10/27/08 - 6 Reasons I love My Job

On Monday, Timothy Lutts wrote about a recent visit with a newsletter publisher from New Zealand and why he loves his job here at Cabot. Tim wrote about how "nobody knows nothing," using as a reference an article that appeared in the Wall Street Journal in May 2007. Interestingly, none of the people interviewed mentioned the issue of credit, which now dominates nearly every news cycle. Tim also discussed a stock that's benefiting from falling fuel prices. Featured Stock: Continental Airlines (CAL).


Cabot Wealth Advisory 10/30/08 - You've Got Questions, We've Got Answers

On Thursday, Michael Cintolo wrote about why it's important to stick to your investing system during volatile times in the market and answered readers' most common questions stemming from the stock market crash. From selling stocks to market timing and from owning dividend stocks to short selling, Mike answers many questions that have been plaguing investors in the last several weeks.


Until next time,

Elyse Andrews
Editor of Cabot Wealth Advisory

Editor's Note: The #1 question we get from readers is, "How can I get into a winning stock earlier?" We've got the answer. It's Cabot Small-Cap Confidential and it's the best guide available to help you get into stocks while they're still in the single digits and hold on until these stocks double, triple and more. Editor Thomas E. Garrity is a research junkie and each month he provides subscribers with an incredibly detailed portrait of a small-cap company that he thinks is poised to explode. Subscription is strictly limited to 500, but the bear market has left some spots open, so click the link below to get started today. There are a limited number of subscriptions available and after they're filled, names will go on a waiting list. These stocks are cheaper than ever so there's never been a better time to subscribe.

P.S. To discuss the U.S. national debt or any other issues relating to investing and the stock market, head over to our blog,

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