The Eternal Misfortune of Pencil Sharpeners 2 is a gargantuan, efficient nation, ruled by Panda Protector with an iron fist, and renowned for its state-planned economy, complete lack of prisons, and keen interest in outer space. The hard-nosed, cynical, humorless population of 18.997 billion Pencil Sharpeners Twice are ruled by a mostly-benevolent dictator, who grants the populace the freedom to live their own lives but watches carefully for anyone to slip up.

The relatively small, corrupt government juggles the competing demands of Defense, Industry, and Education. It meets to discuss matters of state in the capital city of Pandapolis. The average income tax rate is 99.5%.

The frighteningly efficient Pencil Sharpeners Twice economy, worth an astonishing 23,259 trillion Pencil shavings a year, is driven entirely by a combination of government and state-owned industry, with private enterprise illegal. However, for those in the know, there is an enormous, deeply entrenched, broadly diversified black market in Arms Manufacturing, Information Technology, Retail, and Soda Sales. The private sector mostly consists of enterprising ten-year-olds selling lemonade on the sidewalk, but the government is looking at stamping this out. Average income is a breathtaking 1,224,355 Pencil shavings, and evenly distributed, with the richest citizens earning only 4.1 times as much as the poorest.

One-man canoes fitted with the latest tracking technology leave no room for one man, Panda Protector often plays real life games of Tower Defense against hordes of angry villagers, a popular artist is claiming that a raw steak with a dog turd on it is a portrait of Panda Protector, and terrorists are on a first name basis with the officials that stamp their passports. Crime, especially youth-related, is so common that it is unusual to encounter someone following the law, perhaps because of the country's complete lack of prisons. Pencil Sharpeners 2's national animal is the Pencil, which is also the nation's favorite main course, and its national religion is Amerionism.

Pencil Sharpeners 2 is ranked 35^th in the world and 2^nd in the South Pacific for Most Corrupt Governments, with 1,612.32 kickbacks per hour.