The PS2 Puppet of Pencil Sharpeners is a gargantuan, socially progressive nation, ruled by Leader with a fair hand, and notable for its flagrant waste-dumping, daily referendums, and complete absence of social welfare. The hard-nosed, hard-working, democratic, humorless, devout population of 14.108 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 79.0 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 38 per year while the poor average 0.3, a ratio of 129 to 1.

Most people suffer from some form of hearing loss, foreign leaders who don't applaud Leader's speeches are regarded as enemies of Pencil Sharpeners, all recreational drugs are legal, and many believe that the only good Pencil is a dead Pencil. 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 215,244^th in the world and 55^th in Nudist Dreamland for Largest Insurance Industry, scoring -32.83 on the Risk Expulsion Effectiveness Rating.