A few years ago we were having a holiday party and I had set aside a few nice white wines. A red wine got accidentally mixed in with the whites and as I announced that these whites were really good, I poured the red one. My son looked at me and asked with painful politeness, "How is that white?"
The President in his State of the Union address was upbeat. He felt the U.S. was in good shape and he had a lot to be proud of. He cited, for example, the 14 million jobs created since he took office.
But there is another side.
America is more than $8 trillion in debt (a 77% increase) that has been accumulated since he was inaugurated seven years ago. If the President truly wants to take credit for the jobs created, the basic math works out to be nearly $600,000 in government debt for every single job created.
While debt in the US has increased 77% over the last seven years, GDP has only increased by 13%.
Now, you’d think that for each additional dollar the US government was spending and compromising future generations, there would be at least $1 in GDP growth. In the ledger, government spending is put dollar for dollar into the GDP. Ideally you’d get more than $1 in GDP growth. Businesses have to do this every single day. If someone borrows $10 million to buy and develop agricultural farmland, obviously the net effect once finished should result in a property that’s worth MORE than $10 million. But it took them $3.71 of debt to buy just $1 of GDP growth.
How is that good?
But, he declared, "Anyone claiming that America's economy is in decline is peddling fiction." Yet....
The government’s own numbers show that they are completely insolvent, to the tune of nearly $18 trillion. Does this mean nothing?
The annual reports for the Social Security trust funds show that they are rapidly running out of money. Where will the new money come from?
The Census Bureau’s data shows that the earnings for middle class Americans are stagnating. For years. What's the plan? Is it something as yet undone?
The Labor Department’s numbers show that the number of Americans who have dropped out of the work force hasn’t been at this level since the Carter administration.
USDA figures show that the number of food stamp recipients is near an all-time high, simultaneously when the number of homeless children in America is at a record high.
And all of this, at a time when trust in government is near an all-time low.
A lot of people are pleased with the last seven years. But it is hard to understand. And it's unfortunate that any questions raised are not taken seriously and just dismissed as "peddling fiction."
The President in his State of the Union address was upbeat. He felt the U.S. was in good shape and he had a lot to be proud of. He cited, for example, the 14 million jobs created since he took office.
But there is another side.
America is more than $8 trillion in debt (a 77% increase) that has been accumulated since he was inaugurated seven years ago. If the President truly wants to take credit for the jobs created, the basic math works out to be nearly $600,000 in government debt for every single job created.
While debt in the US has increased 77% over the last seven years, GDP has only increased by 13%.
Now, you’d think that for each additional dollar the US government was spending and compromising future generations, there would be at least $1 in GDP growth. In the ledger, government spending is put dollar for dollar into the GDP. Ideally you’d get more than $1 in GDP growth. Businesses have to do this every single day. If someone borrows $10 million to buy and develop agricultural farmland, obviously the net effect once finished should result in a property that’s worth MORE than $10 million. But it took them $3.71 of debt to buy just $1 of GDP growth.
How is that good?
But, he declared, "Anyone claiming that America's economy is in decline is peddling fiction." Yet....
The government’s own numbers show that they are completely insolvent, to the tune of nearly $18 trillion. Does this mean nothing?
The annual reports for the Social Security trust funds show that they are rapidly running out of money. Where will the new money come from?
The Census Bureau’s data shows that the earnings for middle class Americans are stagnating. For years. What's the plan? Is it something as yet undone?
The Labor Department’s numbers show that the number of Americans who have dropped out of the work force hasn’t been at this level since the Carter administration.
USDA figures show that the number of food stamp recipients is near an all-time high, simultaneously when the number of homeless children in America is at a record high.
And all of this, at a time when trust in government is near an all-time low.
A lot of people are pleased with the last seven years. But it is hard to understand. And it's unfortunate that any questions raised are not taken seriously and just dismissed as "peddling fiction."
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