DANGEROUS IGNORANCE

Last night, Romney made two statements that showed dangerous ignorance.

1. He said that Iran needed a route to the sea through Syria. How can one even hope to make a rational decision regarding strategy, when one is woefully ignorant about geography?

2. He said that he balanced his budgets at Bain and the Olympics and therefore could balance the US budget. He does not seem to understand that Bain balanced its budget with borrowed money.

If one is so ignorant about money that one does not understand that you BORROW money from INVESTORS, how can one hope to make a rational decision about national budgetary issues. It is actually kind of fun to realize that when you deposit money in a bank, you are actually investing in the bank. (Too bad the cost of accounting for your money equals the interest payable on your money.)

It is not possible to explain accounting in one or two paragraphs. However, when you borrow $200,000 to buy a house, your personal balance sheet shows a $200,000 debt and a $200,000 asset.

One of the main things investors look for when deciding to invest in something is the debt to asset ratio (debt to equity ratio is looking at assets that can be quickly sold). Investors generally do not like first time borrowers as the borrower may not understand the necessity to repay the money.

The US debt to equity ratio is MUCH LESS than the debt to equity ratio of people and businesses in the US. I have never understood why Republicans believe that corporations are allowed to borrow money but governments are not allowed to borrow money.

I am really tired of the "road to Greece" comment. I think all democratic countries need to remember that they are "on the road FROM Greece".