A Trillion for Your Thoughts

Did you know the US federal debt has increased by more trillions than years Obama has flounced in office? Over nine trillion dollars more in eight years will be the results when Barry finally hits the lecture circuit. I imagine every one of his let me be clear orations will be a bargain in comparison. Some men are worth paying every penny to stay out of politics. And even though The Economy is lower than Erick Erickson’s jowl pouch on my list of existential Western concerns, it’s still relevant to discuss periodically. Particularly its role in politics and potential for socially sub-optimal results.

One of my favorite perches from which to watch the fiscal sunset is US debt clock. There’s a lot of philosophical insight to be found in those spinning red numbers. When the Bush family’s dullest son (himself hardly frugal) left office in early 2009, the federal debt was just north of $10 trillion. Today it is–if you read this quickly–$19.7 trillion.

Such numbers are mostly like the Greek Gods–set high upon Olympus with little bearing on the lives of mortals. And that’s why debt/deficit talk has come to carry such little rhetorical weight. So some unfathomable number is larger than some previous other unfathomable number. What’s that mean to me?

What it means is that no one is feeling the pain of their country’s injury. Debt is a political analgesic. It masks unpleasant realities. If a wife is in a nice house, swank country club, and the front seat of a Mercedes, she will probably not ask many questions about her husband’s crushing line of credit. This is the opiate of choice for modern politicians.

Imagine the state of affairs if Obama had only ballooned the debt at the same rate of his profligate predecessor: $5 trillion. That’s $5 trillion the government wouldn’t have spent in the last eight years. Which is the equivalent of zero federal outlays for a year and a half of his administration. The result: anarchy, bloodshed, or revolution. Debt is how politicians now keep the car running. And its appetite for fuel grows voracious. It does not matter who is elected in November. If America remains as presently constituted and does not default, the debt will be $40 trillion in eight years. So what’s that mean to me?

First, consider what regular people would imagine as the purpose of government. Probably police, schools, fire departments, or interstates. None of these have any material bearing on federal finances. The top six budget items descending are: Medicare/Medicaid, social security, war, welfare, interest on the debt, and federal pensions. Or more simply: gibs, guns, and banks.

What becomes daunting to realize is that these six items alone represent a greater amount than the total of federal tax revenue. Which means the entire agency archipelago outside these areas is financed exclusively through borrowing. Aside from bombing the Middle East, there’s fascinatingly few government functions subsidized legitimately. So what’s that mean to me?

Look at that fifth budget item: interest on the debt, presently at $249 billion/year. This may seem substantial, but it is nothing to the resources future line items will consume. The average interest rate carry is currently 2.2 percent. This is historically low. A doubling of the figure would remain historically low. A tripling to 6.6% would be nothing at all outside the normal range. That’s three-quarters of a trillion annually. Double the debt and you are to $1.5 trillion in annual service, which is nearly half current tax receipts.

Which means eventually you’re doing nothing but owing money to the money you owe.

None of which matters to politicians, who are as equally inclined to drop fiscal disasters on our posterity as they are demographic ones. And we, the dizzy domestic housewives, are just happy the country club dues are getting paid.

Though the point of all this esoterica is not to elevate numbers over real human issues. But rather to understand that none of our social priorities exist beyond future consequence. We may believe morality dictates we fund a global military presence on every border but our own, welfare for the world’s indigent, and a lavish raft of entitlements for every squalling squatter and “minority” that is American on the inside.

We may think these and many other gestures of virtue are the costs of liberal grace. If so, they are ones beyond our capacity to bear. Moral preening has never been cheap. So we borrow. And the pain of our limitations is passed to another day. But when that day arrives, you (and your children) will work for months each year to only pay interest on past indulgences. The vanishing pool of discretionary expenditures will be ferociously contested by the multiplying people of color factions. Your concerns will be immaterial. Public services and infrastructure will grow decrepit and your “fair share” of the tax bill will relentlessly increase.

Pay more, get nothing. That’s what it means to you.

23 thoughts on “A Trillion for Your Thoughts

  1. The result: anarchy, bloodshed, and revolution.

    Is this really what you believe would have happened if the debt under Obama had (going by your numbers) increased by only $5 trillion rather than $10?

  2. An “or” would have been more accurate than an “and” as speculation (as I will change it to reflect).

    Though pull up a federal budget and try carving out roughly $650 billion/year (5 trillion/8 years) while avoiding huge upheaval in the process. About the only thing I can think of would be to stuff federal pensions entirely and cut social security benefits almost in half. That’s a 10 to 5 move, and old people throw crappy riots.

    • Whichever the conjunction, the notion that we sit only a few plausible budgetary cuts away from social violence is cause for reflection. (Although I suppose it would be unremarkable as a general proposition, considering the traditional roles of government.)

      (Purely as an aside, “anarchy, bloodshed, revolution.” would be a third possibility.)

      Yes, I do think the populace will find a temptation to cut social security benefits and, to a lesser extent, federal pensions, increasingly hard to resist. As you note, old people aren’t well equipped to defend themselves, when you get right down to it. On top of that, these old folks would be disproportionately White. That brings two additional factors into play: Their suffering will be more palatable to others, if it is not outright seen as deserved (on either a conscious or subconscious level), and they will have relatively few descendants to protect them.

      • Exactly. At least Faust got his mortal bargain. Many older white liberals will learn they have sold out their posterity for not even a funded federal program.

      • Old people are also completely oblivious to the damage their “paid for” entitlements are causing their progeny. I have heard my own grandparents complain many times about the meager increases in their SS payouts, and it makes my blood boil. They have plenty of money, take several vacations a year, and live in a nice, if modest house that was purchased for cash. They can’t seem to wrap their heads around the fact that it isn’t “their” money they are getting back from paying into the system. The govt squandered that years ago. They are getting what their children and grand children pay into it, and we in turn will get jack shit.

      • “Yes, I do think the populace will find a temptation to cut social security benefits and, to a lesser extent, federal pensions, increasingly hard to resist. As you note, old people aren’t well equipped to defend themselves, when you get right down to it. On top of that, these old folks would be disproportionately White. That brings two additional factors into play: Their suffering will be more palatable to others, if it is not outright seen as deserved (on either a conscious or subconscious level), and they will have relatively few descendants to protect them.”

        Even here, there is some glimmer of reason for optimism. If ‘people who identify as white’ to use the pleonasm du jour were to finally realize their interests were not being served by the USG (and Western governments more broadly) at rates close to the rates ‘people who identify as black’ vote for the Democratic party, the show would be over in an afternoon. Sure, the median white would be older (and wiser, don’t forget that) than his counterpart, but also wealthier, smarter and more practiced in use of firearms.

        As Heraclitus, perhaps the first ‘Western man’, said “One man is worth 10,000, if he is first-rate”. If whites only reach their senses when they are 1/3 of the population, one man only need be worth two. From a fighting perspective, knowing the other side’s human capital is weak, I like those odds.

  3. Historically, it has been found that when the interest on debt exceeds military spending, that is the beginning of the end of empire. The legions retreat back to the homeland, and factions fight for an ever decreasing piece of the pie. We’re still in a 3 to 1 ratio of guns vs interest so there’s still some ways to go, barring black swan events like the seemingly impending war with white supremacist Russia or a massive collapse of the student loan to coffee barista economy.

    I’d say give it 20 years and then we will truly be blessed with the gifts of diversity and plutocracy. Finally, our great country can join the Western hemisphere’s Raca Cosmica just like our vibrant neighbors to the south. It was always destiny, you see, and how lucky we are to be living through such a wonderful change, where outdated notions like the racist and whitist standard of a “first world” country will be meaningless. We are all ONE (Uno) world, no more second or third places!!!

  4. Pingback: A Trillion for Your Thoughts | Reaction Times

  5. Reblogged this on The way I see things … and commented:
    And so it goes.

    —-

    Though the point of all this esoterica is not to elevate numbers over real human issues. But rather to understand that none of our social priorities exist beyond future consequence. We may believe morality dictates we fund a global military presence on every border but our own, welfare for the world’s indigent, and a lavish raft of entitlements for every squalling squatter and “minority” that is American on the inside.

    We may think these and many other gestures of virtue are the costs of liberal grace. If so, they are ones beyond our capacity to bear. Moral preening has never been cheap. So we borrow. And the pain of our limitations is passed to another day. But when that day arrives, you (and your children) will work for months each year to only pay interest on past indulgences. The vanishing pool of discretionary expenditures will be ferociously contested by the multiplying people of color factions. Your concerns will be immaterial. Public services and infrastructure will grow decrepit and your “fair share” of the tax bill will relentlessly increase.

    Pay more, get nothing. That’s what it means to you.

  6. Pingback: And The Walls Came Tumbling Down – Daily Pundit

  7. The “debt” created on ledgers, not based on tangible assets, is not intended to be repaid: what matters to the hocus-pocus finance artists who create it is the servicing of it, the steady stream of interest payments.

    Wouldn’t you love to see the financiers, media folk, university professors, subsidized SJWs, military procurement officers, teachers’ union members, professional athletes and so on Pol-Potted? Cut that debt by dumping all the worthless, non-productive gov. programs, covering the public trough with cement and sending all those “workers” to shovel-ready labor! Simply imagining it makes me smile!

    • The ‘national debt’ isn’t debt. Debt is when an institution owes some property (actual property or third party securities) to a note/bond/etc holder.

      USG owing dollars to China is like a company owing shares of its own stock to China. T-bills are more like stock options than notes payable.

      Everything you think you understand about government finance is wrong. (You aren’t alone: everything that everyone thinks they know about government finance is wrong. There is literally no way to accurately understand government finance: the accounting framework to do so does not even exist conceptually).

      Dollars are securities which impair the balance sheet of USG. But nobody knows what the balance sheet of USG ought to look like in theory as a conceptual matter, let alone what it actually does look like as populated with sound real world data.

      That doesn’t mean ‘everything is fine, go back to sleep’. What it means is that neither the folks who say everything is fine nor the folks who think we are on the brink of apocalypse can possibly know what they are talking about.

  8. On a slightly related note, I wonder sometimes if I shouldn’t become involved in Democratic politics where I live, to avail myself of the high brow looting available to those who run that party. If Hilary Clinton wins, it is apparent the country is beyond saving. Would it not behoove me to try and accumulate as much gold, literally and figuratively, as possible before the collapse?

    There is a fortune to be made in the creation of an empire, and there is a lot of fortune to be stolen in the death of an empire. It strikes me that we’re a lot closer to the latter than the former, so why not run my hands through the till also before the store finally closes?

    I’m deathly serious. I am beginning to wonder if we are not at the “Every man for himself” part of the figurative boat trip that is the American experiment.

  9. Trump (and his supporters) are awful people

    Remember that AZ paper that endorsed Clinton and got all kinds of nasty death threats? The publisher is currently on MSNBC talking about how some of the kids going door to door selling subscriptions are getting guns waved at them because of the endorsement.

    The solution is to send Brock Turner and that affluenza kid to Arizona to sell these newspaper subscriptions.

    In all seriousness, the newspaper’s response to the predictable reaction from the knuckle-draggers in their readership is great:

    http://www.azcentral.com/story/opinion/2016/10/16/publisher-response-to-threats-after-republic-endorsement-clinton-trump/92058964

      • Has everyone else ever wondered how these leftist nutjobs can find time and money to protest during the day when most normal people are working for a living? I guess EBT cards cover protest signs now-a-days?

      • After doing a little looking, “Jeff Miller” is the seventh name this commenter has used here. So nuts should probably be singular in this instance. So that we all know which personalities we’re talking to I’m going to change the name on his submissions in the future to: “Faithful Soros Bedpan.” Username no longer available.

      • This same content was also posted on Sailer’s blog, but under the notorious handle “Tiny Duck.” Whether Tiny Duck is troll or true gadfly is a matter of dispute.

      • He’s a drone. Jeff Miller is Tiny Duck (among others). He scatters droppings across several blogs and returns later under a new name. Though as mentioned above, he’ll only appear under one name here going forward.

  10. Pingback: This Week in Reaction (2016/10/23) - Social Matter

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