Thursday, June 16, 2011

Going, Going, Gone

That was the general sentiment many of us experienced last night while watching the Stanley Cup Final (Boston won 4-0 over Vancouver).  After a thrilling (and “short”) 9 month season, it all came down to this last game. Both teams had a lot at stake.  But as is with all sports, there could only be one champion. Although Vancouver came into the playoffs ranked #1 (what do statisticians know anyway?) it’s not particularly shocking that Vancouver lost.  What was disappointing was how badly Vancouver lost given how hard (and long – did you see “9 month season”?) the team worked to make it to this game: they played the series with Boston out to the full 7 games and won all the preceding playoff rounds.  And the weight of all of Vancouver was on their shoulders: this was to be Vancouver’s first Cup victory in their 40 years as a team. 

So what happened last night – was the burden too great to bear?  Throughout the series the team was “going and going” to the finish but watching the team it was as if the only place they ultimately “gone” was fishing (or to early retirement).  Now what are they going to do – start all over again from the bottom?  And what about the Canadians (especially those from Vancouver) who were as sure of their imminent win as we were about being raptured?  How can they face the world with so much egg on their face?

There might be a solution to this whole mess that could be a win-win for Canada and the Stanley Cup-holding U.S.  As you may have noticed, the U.S. is in a mountain of debt.  Data released today shows our “current account balance” (checkbook with the rest of the world) came in at -$119 billion for the first 3 months of 2011 (yikes).  At this rate we will add $480 billion to our debt this year with the world (“current account deficit”), and this eventually has to get paid back – with interest (inflation, which subtracts from a debt’s nominal value, can only do so much here).  You may wonder who is balancing this checkbook, and why they are employed (did they pass grade school arithmetic?).  That would be all of us, buying more from other countries than they buy from us (to be fair, a lot of this debt is due to ever higher oil prices – but we all know debt is debt).  Now, if you’re in a pile of debt, and need to pay the bills, what do you do?  We start selling our valued possessions (Exhibit A: A woman was in news this week for selling an Obama signed letter to make ends meet).  The same can be true here – the Cup must be worth a lot to Canada, we could restore their national pride and they could help restore our budget.  Maybe $119 billion worth?

If Canadian teams insist on only getting the Stanley Cup the legitimate way (lame), the U.S. should take its latest competitive advantage in hockey and sell the prize to the highest bidder.  Given China’s rise in just about every way (did you see the last Olympics?), and given their Machiavellian winning strategy (did you see the last summer Olympics?) this “trade” might be something they are interested in.   Which is good, because last year we accrued $300 billion in debt with China, and we are on pace for another banner year (we took on $66 billion in new debt in the first 3 months of 2011).  What will our new debt be this year with China?  Hopefully, going, going, gone. 

(Bureau of Economic Analysis)

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