The Eternal Misfortune of Pencil Sharpeners is a colossal, socially progressive nation, ruled by Leader with a fair hand, and renowned for its feral children, enforced nudity, and absence of drug laws. The hard-nosed, hard-working, democratic, humorless, devout population of 9.155 billion Pencil Sharpeners live in a state of perpetual fear, as a complete breakdown of social order has led to the rise of order through biker gangs.

There is no government in the normal sense of the word; however, a small group of community-minded, corrupt, liberal, pro-business, outspoken individuals keep a keen eye out for any attempt to organize such a thing, and ruthlessly crush it. It meets to discuss matters of state in the capital city of Pencilpolis. Income tax is unheard of.

The imploded Pencil Sharpener economy, worth 51.3 billion Pencil Shavings a year, defies classification, with the entire state effectively one black market. Average income is 5 Pencil Shavings, but there is a vast disparity between incomes, with the richest 10% of citizens earning 43 per year while the poor average 0.2, a ratio of 229 to 1.

Eight-year-olds can be seen lighting up in public areas, octogenarian swimsuit models insist that they've still got it, government officials frequently cut taxes as a distraction from antics with their secretaries, and Chekhov's guns are killing the entertainment budget. 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's national animal is the Pencil, which teeters on the brink of extinction due to widespread deforestation.

Pencil Sharpeners is ranked 175,786^th in the world and 7,993^rd in the South Pacific for Most Advanced Defense Forces, scoring -53.76 on the Total War Preparedness Rating.