The Blob is Starring Us in the Face
You may have seen the 1958 B-movie, The Blob. It was the first leading role for a young Steve McQueen.
The story of that movie involved an entity from outer space crashing near a small town and starts consuming everybody. As it does so, the blob gets bigger and bigger and soon is gigantic – and seemingly nothing can stop it.
That ‘blob’ acted similarly to our national debt today. It started small but started consuming everything, has grown to colossal size and seemingly can’t be stopped.
As of this writing the “debt blob” has grown to over 28 trillion dollars. The GDP number for 2020 was $21T. The debt now represents 133% of GDP. At the end of WWII the debt was 114% of GDP. In other words, the debt growth since 2000 has all the characteristics of the blob. It’s never been higher no matter how you look at it.
Let’s look at its growth since 2000.
Fiscal Year Debt GDP Ratio % Inc.
1945 259B 114%
2000 5,674T 55% 2,091.0%
2005 7,933T 61% 39.8%
2010 13,562T 90% 72.1%
2015 18,151T 100% 33.8%
2016 19,573T 105% 7.8%
2017 20,245T 104% 3.4%
2018 21,516T 105% 6.3%
2019 22,719T 107% 5.6%
2020 27,748T 129% 22.1%
2021 28,500T 133% 2.7%
You will see debt and percent of GDP numbers as smaller in various government reports. The reason for that is those numbers use only “debt held by the public” and do not include the $6T in “intragovernmental debt.” This latter is debt held by various agencies and departments of the federal government. For example, Congress has ‘borrowed’ $2.9T from the Social Security Trust Fund. It’s still debt and we owe it. Not counting it is a sham.
The bottom line is in 21 years, our government has run up our debt $23T – over $1T/year on average. At 133% of GDP the current debt cannot be paid if 100% of everyone’s annual earnings and production for a year was given to the government. We’d come up $7T short. The House voted this week to raise the debt ceiling again to accommodate trillions more.
This is not only dangerous, it’s irresponsible. If we were in a major war there might be some justification for what’s been happening. But we’ve run up a formally inconceivable number in peace time.
I know, I know, I’m a voice in the night. You and I hear nothing on this subject from any of our government leaders nor any of the media.
The public is apparently unaware or numb – maybe a little of both – to what our recent Congresses and administrations have done to the financial future of the country. Make no mistake, the long-term future is bleak.
Currently we have an administration proposing another $3.2T in its “everything but infrastructure” bill. This bill is off budget, meaning it’s all debt. The CBO is predicting that bill will actually cost an additional $4B over the next 10 years.
In addition, the administration is proposing a $6T budget for 2022. The expected revenue of the federal government this fiscal year is $3.8T – already an estimated $1T short of expenditures.
On the 2022 budget, a myriad of tax increases is proposed. The usual mantra is “tax the rich” – like somehow they will pay for it. The top 1% of income taxpayers are already funding 38.4% of the government’s current revenue. On average, those top 1% pay 27% of their income to the federal government. Their tax rates are 6 times higher than the bottom 50% of income taxpayers. (If you happen to live in NYC, high income earners pay 61% of their incomes in federal, state and city taxes.) Just what is the ‘fair share” of taxes on the rich? Conservatively, many economists are predicting the currently proposed tax increases will result in the immediate loss of 200,000 jobs. Hardly a fair trade for many and hardly addressing the needed increase in the number of taxpayers to pay for everything.
But, just like the blob, there’s no end in sight to increasing the federal debt. Nothing seems to satisfy it. The blob in the movie just did what it was apparently born to do, consume. The federal government is acting just like the blob – doing what it does by consuming everything.
Those readers familiar with the movie know that ultimately cold, CO2 fire extinguishers were used to paralyze (freeze) the blob. It was then carried off by a jet and dropped on the north pole to keep it frozen and harmless forever.
But there is no happy ending to our debt problems. There is no ‘magic’ to make it go away.
When you voted for your House rep or your senators or the president did you mean to give them a printing press for money and spend as much as they can devise?
It’s past time we, the voters, make it clear to our politicians we do not want inflation or more “wonderful” programs, or backbreaking debt left for posterity.
And if they are deaf to us, we need to simply throw them out!
Hello!!! says the voice in the night.
What we need more than anything is fiscal responsibility.
References:
https://www.thebalance.com/national-debt-by-year-compared-to-gdp-and-major-events-3306287
https://www.pgpf.org/national-debt-clock
https://taxfoundation.org/summary-of-the-latest-federal-income-tax-data-2020-update/
https://www.imdb.com/title/tt0051418/plotsummary
SPIDER Bites
Here’s a lift from the CDC web site:” …few real-world epidemiologic studies exist to support the benefit of vaccination for previously infected persons.” Having said that, the CDC supports vaccinations for those who have been infected. But, if the CDC doesn’t know if it’s a benefit, how can government(s) and private employers require all employees get vaccinated? Certainly, there’s no science to support that requirement. The CDC indicates through last Friday there have been 43,532,306 COVID-19 reported cases in the US with 702,978 deaths.
On Thursday, I presume bowing to big donor developers, CA Gov. Newson signed a law to essentially abolish single-family zoning in California — and green-lighted a series of bills intended to bolster the state’s housing units. The new law allows up to 4 multi-family units (the number in each ‘unit’ is unspecified) in virtually all neighborhoods currently zoned single family. Would you build a house next an apartment complex? If you already own a home in CA, be prepared to have a parking lot and many neighbors next-door. It’s the American dream, right? There go the suburbs.
The stock market responded favorably last week (for some reason unbeknownst to me) to the Fed’s intention to start reducing its bond buying– which should have the effect of raising interest rates a little – but, in my opinion, not enough to head off more inflation. The Fed needs to raise the discount rate, even if just a quarter point, to telegraph it’s serious about inflation.
You likely noticed the FDA expanded its approval for booster doses of the Pfizer COVID vaccine last week for people over age 65 and those in high-risk jobs. It previously approved the extra shot for those 18+ folks who are severely immunocompromised. The FDA’s Advisory Committee on vaccines, made up of the Chair, members with scientific, medical, and public health expertise, and a consumer and industry representative, voted 16-2 against approving ‘boosters’ for anyone else. Despite that recommendation, the Biden administration wants all Americans to receive a COVID booster shot. What science is he following? Vax mandates continue for federal government employees, including the military, and some private sector companies. It would seem such mandates are unconstitutional on their face in America. Isn’t the country still one of freedom and liberty?
It took the Senate’s Parliamentarian to remove the “path to citizenship” section/language aimed at illegal immigrants from the ‘infrastructure bill.’ Without quoting, what she said was those provisions were ‘incidental’ to the bill. When will this kind of no-nonsense interpretation become more commonplace for provisions and riders on bills which have nothing to do with the stated intent of the legislation?
The administration is apparently prepared to remove restrictions in November on UK and EU citizens who have been vaccinated and wish to travel to the US. I don’t know why its delayed 2 months. In June the EU and UK removed ravel restrictions for the US vaccinated.
Anyone who doesn’t believe the southern border has become a national crisis this year has their head someplace it shouldn’t be. What’s happening is a blatant nonenforcement of our laws and a brazen violation of oaths taken by those in charge. Despite words to the contrary, the border is obviously wide open.
