The PS2 Puppet of Pencil Sharpeners is a gargantuan, socially progressive nation, ruled by Leader with a fair hand, and remarkable for its free-roaming dinosaurs, smutty television, and spontaneously combusting cars. The hard-nosed, hard-working, democratic, humorless, devout population of 16.384 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 91.8 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.

Fraternities are notorious for drunken hooliganism, the government prefers to leave the past buried, prices fluctuate manically for no fathomable reason, and a sledgehammer and a spray can are seen as the default tools of political debate. 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 277,440^th in the world and 64^th in Nudist Dreamland for Largest Publishing Industry, scoring -46.15 on the Bella Potter Productivity e-Index.