The Executive Desktop
The US National Debt -
Information and Analysis The Highest Risk to The USA
The US Debt
is a current feature for DFIN. This will be a continuing focus for
DFIN going forward. Think of this site. DFIN as a canary in a coal
mine. i.e.: an early warning
It is incumbent on every
generation to pay its own debts as it goes. A principle which if acted
on would save one-half the wars of the world; Thomas Jefferson
Why Do We See This as a Problem?
mid 70s the US was focused on reducing debt.
US would typically run up debt for a war
the war the governments focus was to pay off the debt
The US Government is not immune
from the dangers of too much debt. Think back to 2007 when consumers
did what they could to borrow and buy one or more homes. This did
not end well as
The last time the US was debt free was after the
War of 1812 during the Jackson presidency
After WW2 a
great effort was made to reduce the debt and pay for the war
including tax rates as high as 91%
A Libertarian Perspective - Only Five President Did This Damage
After Hundreds of Years
"The Jefferson administration's enduring
achievement was to contain the federal government by restraining its
fiscal power. That was Gallatin's work. He abolished internal revenue
taxes in peacetime, slashed federal spending, and repaid half of the
Oil and Natural Gas Prices
in Europe February 2022
Russia and China Team Up and
Russia Has Troops at Ukraine Boarder
US National Debt Exceeds
Thirty (30) Trillion for First Time
Debt levels started to explode during the 1980s and 1990s, rising from $908B
when Volcker raised the Fed rate to 20% to tame inflation to $5.6T when the
Glass-Steagall Act was repealed in 1999.
For the first 50 years in our visual from 1929 until 1979, the U.S. national
debt only grew gradually. It was just $16B in 1929 or about 16% of GDP,
rising to $827B or 31% of GDP in 1979.
In the late 1990s, the growth of the national debt slowed down. The U.S.
government actually ran a surplus in 2000, and the debt decreased as a
percentage of GDP from 65% in 1995 to 55% in 2001.
The U.S. debt resumed its skyrocketing trajectory with the War on Terror,
the Great Recession and now the Coronavirus crisis. It’s projected to be
well over 100% of GDP for the foreseeable future, topping $30T in 2021.
US Trust Funds
Politicians and US Trust Funds :
deterioration of many USA
Trust Funds should have been in analysis and repair since at least 2000.
It appears that an easy fix was passed by.
Trillion Dollars and
The USA Took 205 Years to Reach 1 Trillion in
National Debt : The magic date was October
"When Ronald Reagan took office in January of that year, the gross domestic
debt, as a percentage of the nation’s annual income, had reached its lowest
point since 1931: 32.5 percent. As the Republican presidential nominee,
Reagan had often spoken out during the campaign against deficit spending.
Once ensconced in the White House, however, he encouraged Congress to spend
heavily on arms while also cutting taxes. As a result, during the eight
Reagan years the national debt soared.
History of the United States Public
The 2020 US Depression is accelerating the speed to our reaching the inevitable
crippling debt disaster. In May of 2020, the US debt to GDP is at
highest level since WW2.
150 Years of US National Debt as a % of GDP
I am not a fan of
Alexander Hamilton because he was the first big government deficit spender.
The following is quoted from a Cato publication from June 2015 that is in line with my beliefs..
for the nation, Jefferson’s election to the White House in 1800 was the
beginning of the end for the big‐government Federalists. Jefferson and
his Treasury Secretary Gallatin substantially cut the debt before the
War of 1812 intervened. After the war, Jeffersonian leaders pushed once
again to run surpluses and pay down the debt. That anti debt
drive succeeded with the complete extinction of federal debt under
President Andrew Jackson in the mid 1830s.
Outside of the
Great Depression and WW2 President Johnson changed the game and ramped up spending. Only President
Clinton and Newt Gingrich had success in creating a budget surplus for a few
In the mid 1980s the USA accumulated 1 Trillion in debt for the
first time. In 2021 US debt will reach about 31 Trillion and we are
growing the debt by at least two Trillion per year. This spending is
The following Graphic illustrates the total debt
outstanding compared to the GNP. It is common belief that 100% is a danger
point. I am not that kind. This explosion in debt will be a problem and any delay in
gaining control will add to
the pain for future generations.
US Inflation - The US Deficit Creates Money and More Money Creates
In May 2021 the market has growing concern for inflation
due to the debt, FRB monetary policy and explosive Fiscal policy. Those with
debt and physical assets may be hurt less than average. The low income and poor
will be harmed the most.
Global Government Debt is Becoming a Big Problem
Japan has the greatest Debt to GDP ratio but they
traditionally have a high level of citizens holding of the national debt.
Still poor money management but they are not reliant on foreigners and foreign
government. In the past 100% was considerded to be the end.
"Fourteen countries fill out the third circle (109%-138%), including some of the largest economies in the world: Canada (109.9%), France (115.8%), Spain (120.2%), and the United States (133.4%), whose debt-to-GDP ratio, according to this map, is just below that of Mozambique. As per the U.S. Debt Clock, America’s debt-to-GDP ratio is just 128%. Still, it’s the same ballpark: the country owes its creditors roughly 1.3 times all the goods and services produced in the U.S. in a year."