Gongol.com Archives: July 2016
$600 billion is too hard to contextualize on its own. On a per-capita basis, shared among about 324 million of us, it's about $1,850 per person. That's the amount by which the United States is overspending every single year. In a family of four, that's $7,400 in deficit spending per year at the Federal level. Compare that to the national median household net worth of about $81,000, and ten years of deficit spending on behalf of four people (plus a little bit of interest) would be enough to wipe out the entire net worth of the median American household. That's obscene. So is the metric from another angle: Our economy produces $18 trillion or so in goods and services per year. A deficit of $600 billion represents more than 3% of that. An economy experiencing consistent growth of 2% a year can easily withstand deficit spending of 1% of GDP -- no big deal. This year's overspending is more than paid for by the expansion of the economy by next year. But an economy that grows at about 1% a year can't handle 3% in deficit spending. And we're being floated two huge bailouts that don't get any of the acknowledgment they deserve: Near-zero interest rates mean that the cost of carrying the Federal debt is small, and by virtually any measure, energy is absurdly cheap right now -- energy cost deflation is real. Those two factors are cushioning us from the consequences of Federal overspending, but they aren't at all guaranteed to last.
So concludes The Economist. They're probably right. An open-minded conservative and an open-minded liberal probably have more in common with each other than with their party cohorts.
Better for a community to chart its own original course
Note: One of America's chief exports is aircraft
Fortunes for electric cars have really done a 180° turn in the last couple of decades