$19,573,444,713,936.79

[Tim Liston]

I just happened across this....

------------------------------ Public Debt ------------ Intergovernmental ------------------------ Total Debt
09/30/16 -- $ 14,173,423,516,895.82 ------ $ 5,400,021,197,040.97 ------ $ 19,573,444,713,936.79
09/30/15 ---- 13,123,847,198,347.81 -------- 5,026,770,468,136.52 --------- 18,150,617,666,484.33
----------------------------- ========== ---------------------- ========= ------------------------ =========
--------------- $ 1,049,576,318,548.01 -------- $ 373,250,728,904.45 --------- $ 1,422,827,047,452.46

So we added $1.43 trillion to our national debt by way of the FY 2016 deficit. Those are the kind of deficit numbers we saw during the depths of the 2008-2009 “great recession” when tax revenues tanked. Except in the fiscal year just ended, tax revenues were at an all-time high. But obviously our expenditures (defense, “entitlements,” etc.) were even higher. MUCH higher. Guess what happens in recession that’s now underway?

By the way, the national debt is now about $160,000 for each of the 122 million U.S. taxpayers, most of whom don’t have two nickels to rub together. Our FY 2016 GDP amounted to about $18.45 trillion. So if we monetized our entire country’s annual production (e.g. sold it to China!), we still could not pay off our debt.

Oh and none of this counts the “off balance sheet” stuff like the unfunded Medicare, Social Security and public pension promises that now amount to over $100 trillion. And it doesn’t include household and corporate debt, which are exploding too especially as corporations borrow like mad to purchase and retire their own stock.

(Oh and as an aside, I see where Alaska wants to borrow money from Asian lenders at 4% and invest it in the stock market, hoping to earn 8% so they can make a small dent in their unfunded public employee pension obligations. WHAT? Madness….)

Japan’s national debt is now about double their GDP. I don’t know where they stand with unfunded promises. But they’re printing “money” as fast as they can to “pay” their bills. Just like we are in the U.S. Of course, someday the Japanese people will come to realize that their “money” is worthless and they’ll be right back in the 13th century. We’ll read about it in the paper or online someday. But not for long….

[Lori Allen _]

Tim,
Do these figures include Obama's great give away to Iran? Or his numerous contributions to the Muslim Brotherhood? Imagine how many Americans that money could have helped, or better yet, help pay down our national debt. Obama is worried about his legacy? Besides adding more to the national debt, he has also made us the most at risk country right now. His associations with the Muslim terrorist groups is very disturbing!

[cameron karslake]

"Give away" to Iran???

C'mon Lori, you can do better research than that I'm sure.

The money Iran was "given" was their money(!), frozen in our banks for years.

Not a gift, but a return of their own funds.

Look it up!

[james fitzgibbons]

I just happened across this....

------------------------------ Public Debt ------------ Intergovernmental ------------------------ Total Debt
09/30/16 -- $ 14,173,423,516,895.82 ------ $ 5,400,021,197,040.97 ------ $ 19,573,444,713,936.79
09/30/15 ---- 13,123,847,198,347.81 -------- 5,026,770,468,136.52 --------- 18,150,617,666,484.33
----------------------------- ========== ---------------------- ========= ------------------------ =========
--------------- $ 1,049,576,318,548.01 -------- $ 373,250,728,904.45 --------- $ 1,422,827,047,452.46

So we added $1.43 trillion to our national debt by way of the FY 2016 deficit. Those are the kind of deficit numbers we saw during the depths of the 2008-2009 “great recession” when tax revenues tanked. Except in the fiscal year just ended, tax revenues were at an all-time high. But obviously our expenditures (defense, “entitlements,” etc.) were even higher. MUCH higher. Guess what happens in recession that’s now underway?

By the way, the national debt is now about $160,000 for each of the 122 million U.S. taxpayers, most of whom don’t have two nickels to rub together. Our FY 2016 GDP amounted to about $18.45 trillion. So if we monetized our entire country’s annual production (e.g. sold it to China!), we still could not pay off our debt.

Oh and none of this counts the “off balance sheet” stuff like the unfunded Medicare, Social Security and public pension promises that now amount to over $100 trillion. And it doesn’t include household and corporate debt, which are exploding too especially as corporations borrow like mad to purchase and retire their own stock.

Take 160,000 from the richest people in U.S. who pay little taxes and we will be all set.

(Oh and as an aside, I see where Alaska wants to borrow money from Asian lenders at 4% and invest it in the stock market, hoping to earn 8% so they can make a small dent in their unfunded public employee pension obligations. WHAT? Madness….)

Japan’s national debt is now about double their GDP. I don’t know where they stand with unfunded promises. But they’re printing “money” as fast as they can to “pay” their bills. Just like we are in the U.S. Of course, someday the Japanese people will come to realize that their “money” is worthless and they’ll be right back in the 13th century. We’ll read about it in the paper or online someday. But not for long….

[Tim Liston]

Now $20,162,176,797,904.13....

Huzzah!

We finally did it! By some odd coincidence, the day after Trump and Congress decided to forevermore forego the notion of a debt ceiling, we officially added $317.6 billion to the national debt (that’s 3-4 months’ worth in one day!) to top that magical $20 trillion mark. Good for us!

And yesterday was the same day the stock market shrugged off Irma and also reached a new high, with the S&P 500 hitting 2490 in this morning’s futures market and closing even higher still.

Coincidence?

Nope. Remember, when one says “the S&P 500 hit a new high today” you have to ask yourself one question. A new high compared to what? (I’ve asked the “compared to what” question a time or two in other LO posts.) Well the answer of course is “compared to U.S. dollars.” But the dollar is not a static measure like a yard or a gallon or a Centigrade degree. The dollar goes up and down too, every day. So comparing anything to the dollar is kind of senseless actually. You can do it, it’s done all the time, but it’s not always meaningful. (As an aside, it appears even a “gallon” is starting to fluctuate, and is now 3.6 quarts in some instances.)

Here’s the thing. The stock market is “up” about 10% since the beginning of the year, compared to dollars. Well guess what, the dollar is down 10% this year. So in reality the stock market is not up at all. In fact gold and real estate are also up 10% this year. If you measure the stock market in gold instead of dollars, the stock market is down a little for the year.

Now, if you’re not reading this with the help of your index finger your saying “Tim, you said the dollar is down 10% this year. Compared to what!” (Haha, you’re so smart.) The answer is, compared to other currencies. Because when the talking heads say “the dollar is down” they’re comparing it to other currencies like the euro, pound, yen, etc. (But not the yuan because China doesn’t let it float against the dollar.) And those are fiat currencies too, printed by the trillions out of thin air just like the dollar. Which makes the dollar’s slide even worse than the nominal 10% drop given in the financial press.

THE STOCK MARKET IS NOT “UP” 10% BECAUSE THE ECONOMY IS ROARING. THE STOCK MARKET IS “UP’ BECAUSE THE THING IT’S MEASURED AGAINST, THE DOLLAR, IS DOWN. PERIOD.

So why is the dollar down so much? Easy. Because we’re creating so many of them out of thin air. Anything there is lots of, especially when more are easily created or found, tends to lose value over time. Not just Beanie Babies and soybeans. Even dollars.

And why are we creating dollars willy-nilly?

I can give you 20,162,176,797,904 reasons why. We have to, that’s why. China, Japan and the others are no longer lending us money. They wised up years ago. So we have to just print more, which we can do since Nixon took us off the gold standard so we could pay for Vietnam.

Finally, circling back, that’s why it’s no coincidence whatsoever that stocks hit new all-time highs the same day the debt ceiling surpassed $20 trillion. The stock market, at least these days, is not an investment that hopefully gains value. And it probably won’t be for some time to come. The stock market is a wealth preservation strategy, and a very good one. Presumably the stock market will keep pace as monetary inflation forces up the cost of other things you need and want to buy. But that’s it. Selling your stock to buy a few acres of land will net you no more acres in ten years than it does now.

But there’s a big problem with the $20 trillion debt-fueled run-up in the stock market. It’s musical chairs. We’re all romping around listening to the music, and having fun now, but we know the music will stop sometime. At least many of us do. We’re wary, looking for some sign that the music is stopping, and we’re eyeing the closest chair. All the while still hoping the music plays on.

$20 trillion is impossible to pay back. That’s about $100,000 for every taxpayer in the country. And since upwards of 75% of us live paycheck-to-paycheck, that’s $400,000 for every one of us who have any money at all. Not happening.

So congratulations America. You’ve lived beyond your means for decades, and run up a tab that cannot and will not be paid. $20 trillion and growing. I cannot say when or how it ends, nobody can. But it will end. As for me, I’m still in, though wary and easing out slowly. I am figuring the S&P hits 3,000 in the next couple years. That’s another 20%. And I’ll be 20% lighter in stocks by then. And the funds raised by cashing out are not going to cash that’s for sure. Something (things) more tangible.

$20,162,176,797,904.13 is a lot of money….

[ryan costa]

Gold Standards are only pretend no matter how legal or official they are.

Escalating deficits are endemic to Reaganomics. We've been doing the same stuff for 35 years or more.

Progressive income taxes are necessary the lower tariffs are, the more mergers and acquisitions there are, and the bigger a nations preoccupation with being a "global super power is".

[Tim Liston]

Hi Ryan.

A gold standard does seem rather silly. But here's the thing. Gold is scarce, hard to find, tangible/divisible and doesn't degrade or get used up. So the gold standard is (was) very effective at controlling the creation of new money. As I'm sure you know, creating more money than is justified by productivity increases (monetary inflation) sooner or later results in price inflation unless the economy at the time is just terrible (sound familiar?). And I don't care what the Fed says about the "appropriate level" for inflation. The appropriate level for inflation is 0%.

If our political leaders had some semblance of fiscal discipline, we would not need an artifice like gold (or cryptocurrency) to back our money supply. But politicians like to spend money....

Deficits first got rolling with Vietnam I believe. Certainly Reagan and the supply-side jabberwocky didn't help....

[ryan costa]

Jimmy Carter was the last fiscally conservative President. He proved most people don't like it.