Debt 20200501

Personal Income

Home Prices

S&P

Federal Revenue

Percentage of the population employed

You’d think with a higher percentage of the population employed than 41 out of the last 50 years,  personal income, home prices, investments, Federal Revenue per taxpayer and per capita all outpacing reported inflation quality of life would be at new highs with the U.S. government running budget surpluses unfortunately we all know this isn’t the case.

Since the U.S abandoned the gold standard annual Federal spending has averaged 130.75% of  annual Federal revenue, in 2020 and 2021 219.23%.


Data Spreadsheet & Sources

Period Total Federal Spending as a Percentage of Total Federal Revenue
1970-2008 122.42%
2009-2021 143.47%
2020-2021 219.23%

Annual Federal spending per taxpayer is equivalent of 85% of annual personal income.


Data Spreadsheet & Sources

 

Period Average Annual Federal Spending as a Percent of Average Annual Personal Income
1975-2008 61.69%
2008-2019 61.26%
2020-2021 87.33%

U.S. Federal debt has increased by

 

Per capita and per employed person Federal debt is at all time high and climbing faster than any other period in history.

 

U.S. Debt to GDP is higher now higher than World War 2

Annual Federal revenue in 1971 was 45.85% of total Federal debt, in 2021  annual Federal revenue is 11.16% of total Federal debt.


Data & Sources

From 1971 through 2007 the average U.S. Treasury rate was 8.70%, 3.99% above reported inflation. From 2008 – 2020 2.67%, 0.94% above reported inflation.


Data & Sources

Increases in all Federal government expenditures are are governed by reported inflation.

      • Federal debt service cost
      • Social Security
      • Government employee and military pensions
      • Medicare
      • Government contracts

Containing reported inflation has saved the Federal government literately trillions of dollars in debt service cost alone. If Treasury rates returned to the 1970 through 2007 average of 8.70% it would consume 68.99% of total annual Federal revenue.

1990 total Federal debt 3.206 trillion, debt service cost 298 billion
2020 total federal debt 26.880 trillion, debt service cost 538 billion

Flight to quality is now a thing of the past, it’s nothing more than a footnote in history, inflation and real rates of return disappeared with fiscal responsibility.

Two dent downgrades

inability to fiance

Unable to sell debt on the open market

creation of money

Drop in the epic m1 chart

 

 

From 1971 through 2007 annual Federal spending averaged 21.91% more than annual revenue.

From 2008 through 2021 54.12% more

2020 and 2021 119.23% more.


Data & Sources

From 1971 through 2020 Federal debt grew by 26.50 trillion dollars while reported budget deficits total only 17.85 trillion.


Data & Sources

With new policies trade deficits have started to escalate, so have purchases of U.S. treasuries by foreign investors

Trade defiects

Foreign buying for US Treasureis

Monetization has fully engaged

GDP per capita versus inflation

Unfunded liability

Employment

Inability to pay a competitive rate

Fictitious inflation

 

Growth in income has outpaced inflation

Home prices

Investments

Federal Revenue per capita

Federal spending per capita

To show you how fictitious BLS.Gov

New deal

World War 2

Debt downgrades

Federal Government’s inability to borrow on the open market

Fed’s creation of money

Per taxpayer debt escalated from to , per capita debt

Rest of the world’s debt per capita

resulting in two debt down grades in 2013 the latest in 2013, currently U.S. Federal Debt shares the same credit rating as Finland and Hong Kong.

Can you justify this? The Federal Government spent $53,647 on every employed person in the U.S equivalent to 89.95% of average personal income.

In 2021 it’s running at 84.71% of personal income (this is without the 4 Trillion in additional “stimulus” or $27,480 on every employed person.


Data & Sources

Assets and income priced in gold

Top 20 stocks over the last 20 years

Have to watch monetization

Massive stock sales prior to the hike in long-term capital gains

Long-term bond holders are going to hemorrhage

Massive foreign liquidation

Higher corporate taxation, more regulation and a hike in minimum wage will will make U.S. corporations relocate offshore, Federal corporate tax revenue will decline.

High net worth individuals will move assets and income offshore further reducing Federal tax revenue

Trade deficits will escalates

The Federal Government will be unable to borrow enough money to sustain it’s budget and unable to satisfy unfunded liabilities

Trillions more money will b e created

On deck an inflationary depression

You can let these fundamentals work you or you can work them

Being on the right side of economic change.

 

Published by

Asset Investment Management

Family Office, Advisors