Showing posts with label Congressional Budget Office. Show all posts
Showing posts with label Congressional Budget Office. Show all posts

Wednesday, March 12, 2025

By The Numbers - The Fiscal Cliff That Is The National Debt and Why No Other Issue Matters

We have often warned that the skyrocketing Federal government national  debt is eventually going to crash our economy, our financial stability, and our democracy if the situation is not gotten under control and under control  quickly. Today’s post is going to review the statistics and dangers of the national debt and why the Washington politicians have to take some serious budget actions and reductions soon or the whole house of cards of our financial system and economic stability is going to go over the fiscal cliff.


Some Federal budget statistics in no particular order that should scare the hell out of you:


  • If you had spent $1,000,000 a day from the day that Christ was born, you still would not have spent a trillion dollars.

  • Spending a million dollars a day over the past two centuries or so would take you to about $750 billion.

  • The Federal government national debt is currently about $36 trillion.

  • Thus, the current national  debt is about 50 times larger than the amount of money you would have spent if you had spent $1,00,000 a day since Chrisst was born.

  • There are about 154,000,000 Federal tax returns filed every year.

  • Thus, on average each of those taxpayers would have to pay about $234,000 each to pay off the national debt.

  • Given there are about 340 million Americans living in the country today, each man,  woman and child would have to pay out about $106,000 each to pay off the national  debt.

  • A family of four then would have to pony up about $424,000 to pay off the  national  debt.

  • If you think that “taxing the rich”  more would pay off the debt you are absurdly wrong.

  • According to Forbes magazine, as of late 2024, Elon Musk was the richest American with an  estimated wealth of $244 billion.

  • Even if you taxed his wealth at 100%, his $244 billion would pay off less than .7% of the national debt, not 7%, .7%.

  • If you only took 10% of his wealth you would pay off only .07%.

  • If you taxed the wealth of the ten wealthiest people in the country at 100% and applied it against the national debt you would pay off only about 4.3% of the debt.

  • If you only took 10% of their wealth, you would pay off only .43% of the national debt.

  • And finally, according to Forbes, the total wealth of the 400 wealthiest Americans comes out to about $5.4 trillion, which if you confiscated all of it and applied it to the  national debt, you would pay off less than 15% of the debt.

  • Thus, taxing the rich more makes no sense since even if you took ALL of their wealth and applied it to paying down the debt, you would only pay off a very small portion of the $36 trillion on the books.

  • Oh, and by the way, this $36 trillion doesn't include the over $80 trillion (source: Congressional  Budget Office) in unfunded government liabilities for  Social Security and Medicare’s budgets that are going to be needed over the next 75 years.

  • To  meet those unfunded liabilities, the Federal government would need to collect, on  average, an additional $1.07 trillion a year for 75 years to keep Social Security and  Medicare solvent under the current assumptions and parameters of the programs.

  • But in 2024 the Federal government only collected $4.92 trillion in tax revenue which means to cover the additional $1.07 trillion a year it would have to raise taxes by about 22%.

  • However, of that $4.92  trillion collected, about $1.107 trillion of that was spent on defense and $1.124 trillion was spent SOLELY to pay the interest on the  national debt (Source: Wall Street Journal  article, February 22, 2025.)

  • Thus, about 45% of the Federal  government’s revenue stream was spent on only two budget lines, interest payments on the debt and defense before any other government expense was considered..

  • In theory, if the Washington political class had been operating on a balanced budget over time, then there would not be $1.124 trillion being paid out of taxpayer taxes every year to service the national  debt which means that on average, every one of the 154 million taxpayers would have an additional $7,300 in their bank accounts every year, $7,300 that wasn't going to fund interest payments on the ever escalating national debt..

  • But the Biden administration spent $6.75 trillion in fiscal 2024, adding a whopping $1.83 trillion to the national debt.

  • Thus, in fiscal 2024 the Federal  government under Biden  collected more in taxes than any government entity in the history of mankind and still  overspent it by 37%, indicating he and the rest of Congress never had an intention of getting  Federal spending under control.

  • Given the over spending by $1.83 trillion and about 154 million taxpayers, on average each taxpayer would have saved about $11,800 in taxes if Washignton had just spent what it had collected in taxes.

  • Since the national debt in 2024 was about $36 trillion and the GDP  of the entire country was about $29 trillion (GDP - value of all  goods and services produced in the  economy in a year), even if every dollar of the GDP was used to pay down the national debt we would still be looking at $7 trillion of debt.

  • With the exception of the covid years, the debt to GDP ratio has never been higher, 1.24% in fiscal  2024.

  • Going back to the Wall Street Journal article cited above, written by Niall Ferguson, he analyzed the historical relationship between defense spending and national debt/interest payments and concludes that once defense spending falls below debt servicing costs, like it did for the first time for this country in 2024, the decline of all great historic powers begins.


In the face of these  dire statistics and situation, Washington folks have been busy spending billions and billions of dollars on the following nonsense:


  • $20 billion for a Sesame Street play in IRAQ.

  • $4.5 million to “combat misinformation is Kazakhstan”

  • $3.9 million for “LGBT  causes in the western BALKANS

  • $6.0 million for tourism in EGYPT

  • $2 million to fund sex change operations in GUATEMALA 

  • Billions more for similarly inane and corrupt projects


If you are upset because Trump and Musk are shutting down government functions like these listed here but are ignoring the real threat to this country, the national debt and out of control Federal government spending, then you and I have different priorities. And while I respect your right to have a different view and different priorities, I am going to continue to construct my parachute because when the Federal government and the country shortly and  likely go over that fiscal cliff, I want to be ready and not go splat on the fiscal cliff canyon floor.


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If you agree that we need to deseat every member of Congress for their lack of success and accomplishment, then please consider going to the following petition link to help the cause:


https://www.change.org/p/deseat-congress-reset-freedom



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Wednesday, April 5, 2023

April, 2023, By The Numbers: Social Security Continues To Sink into Insolvency, LA And Chicago Continue to Be Depopulated, Seattle Continues To Be Lawless and More

 On a periodic basis we do some posts that fall under the theme of “by the numbers.” Rather than trust what the American political tells us about reality, we like to examine the real numbers and the real reality in the world to understand what is actually going on. Relying on politicians, and their cohorts in the media, to tell us what is reality is always a sucker bet. They have their own agendas and goals, usually centering around their needs and self-enrichment. So we need to look at the reality of the numbers to determine what is really going on.

Previous analyses of “by the numbers” can be accessed by entering the phrase in the search box above. This is the third and final post this month where we look at the numbers to truly find out how good, not likely, or bad, most likely, the American political class is doing in managing our tax dollars, protecting our freedoms, and resolving major issues that affect all of us


1)The Social Security and Medicare processes are lifelines for tens of millions of disabled and elderly Americans. They have been Federal government programs that have been pilfered and abused by the Washington political class for decades. As a result, both programs are currently in free fall from a fiscal perspective. They no  longer collect enough money to cover ongoing expenses, requiring the Treasury Department to cover their shortfalls from general taxes. 

And in a relatively short amount of time, the current numbers of the programs indicate that formal, official bankruptcy is not that far away:

  • According to the current annual report of the Social  Security Board of Trustees, the program’s trust funds will run out in about 11 years.

  • The Medicare Hospital Insurance trust fund trust fund will be depleted in only 8 years.

  • Thus, within about a decade, assuming that Washington politicians do not act, tens of millions of Americans will see a substantial cut in their retirement funds and medical coverage.

  • These findings are consistent with analyses by the Congressional Budget office which also puts the demise of both trust funds about 10 years from  now.

  • Current annual Social Security tax revenue is about $119 billion short of its expected 2023 payouts and is expected to be about $2.8 trillion short of what it needs over the next decade.

  • The Trustess estimate that drastic actions are necessary to bring revenue and expenses inline with each other including  increasing payroll taxes immediately by 28 percent (3.4 percentage points), reducing spending by 21 percent for all beneficiaries, reducing spending by 25 percent for new beneficiaries, or some combination. 

Not a pretty picture. The bottom line from a Social Security perspective that if current day politicians do nothing, then tens of millions of Americans will see a 21% reduction in their monthly Social Security checks in a about a decade. The longer that no action is taken by Washington politicians to fix the problem the more painful the end result will be. The numbers do not lie and they are devastating. 

2) Many, many times in this blog we have documented how stupid the whole “defund the police” movement was. It was nothing more than an empty slogan that had no plan to  replace the depleted police budgets across many liberal run cities. As a result, crime has rampaged in those cities, depleted police resources has endangered citizens’ lives, and staffing police forces has never been harder, resulting in more crime.

The city of Seattle is facing truly bad effects and numbers from their whole defund the police actions:

  • Seattle’s crime rate in 2022 was the highest it has been in 15 years.

  • Homicides in the city were up 24% in 2022 vs. 2021.

  • There were almost 5,600 violent crimes against city residents in 2022,  about 15 violent crimes per day.

  • There were 1,600 car thefts in the city in 2022.

  • Not surprising, the city politicians had reduced the city police budget by 17% in 2021.

Not good numbers, but pretty obvious numbers: reduce police resources,  crime goes up, especially since the defund the movement had no viable replacement plan for the reduced police functions. But despite the numbers, Mayor Bruce Harrell says, “The city is on a good trajectory, with our holistic approach to public safety.”

Seriously, homicides are up, violent crime is a serious issue and the city is on a good trajectory??? Could a politician be any more out of touch with the reality that these numbers show?

3)Many times in this blog we have predicted which state and city governments we think will go bankrupt because of the incompetency, ignorance, and lack of caring of the politicians running those states and cities. As a result, these states and cities have built up large unfunded future financial liabilities and current debt levels which has required them to raise taxes which has resulted in businesses and residents leaving those cities and states which has reduced the tax base which has caused more debt which has required taxes be raised and the financial  death spiral is underway.

Cities we have predicted that are most likely to go bankrupt relatively soon include New York City, Chicago, Los Angeles, San Francisco, Portland and Seattle. States we have predicted that are most likely to go bankrupt relatively soon include California, New York, Illinois, and New Jersey.

The latest demographic numbers indicate the Los Angeles and Chicago are still very strong contenders to go bankrupt soon as their financial death spiral starts to form:

  • Los Angeles county, home to Los Angeles city proper, lost over 90,700 residents in the past year alone according to the Census Bureau, the worst loss of population of any U.S. county.

  • Cook County, the home county of Chicago, lost the second most residents, over 68,000 residents lost in just one year.

  • The top ten counties for population loss over a single year were in  liberal/blue states and the top ten counties that gained population were in conservative/red states.

  • The top 10 counties gaining population were all in either Texas, Florida, and Arizona, states with much lower tax and government regulation burdens than states like California and Illinois.

  • The top five counties losing population were in California, Illinois, and New York.

So, no surprises from the latest numbers. People want to be free and safe. And being free includes keeping as much of their hard earned wealth as possible. Politicians in states like California and New York seemingly want to take as much from their residents in the form of taxes while at the same time not improving the quality of life or the safety of life of those taxpayers. They allow government spending to run amok while reducing vital services like police, fire, and education.

The numbers continue to be consistent: our original predictions on what cities and states will go bankrupt first and soon continues to be a good bet.

4)And while LA and Chicago continue to form their financial death spiral, don’t rule out Portland, Oregon as a city that might be a dark  horse in the race to bankrutpcy:

  • Crime has skyrocketed in the city over the past few years as city politicians have been totally ineffective in reigning in the crime wave.

  • As a result, Cracker Barrel restaurants recently announced they would be closing their remaining two stores in the city, likely because of the crime increase.

  • Walmart recently announced it would be closing its two and only stores in Portland because of crime, a reality that was forecasted by the retail chain’s chairman, too much theft.

  • Green Zebra, a Portland based retailer, has shut down its three city stores.

  • Only 11% of city residents say the city is headed in the right direction.

  • Since city officials defunded their city police force a few years ago, the force has been understaffed by almost 200 officers, likely a contributing factor to the higher and higher crime rate.

  • Shootings have tripled since 2019 in the city, homicides are at their highest rate ever, car thefts have doubled since 2019, and a whopping 2,600 fewer businesses operate in the city since March, 2020.

Impressive that a city’s politicians could do so much damage in so short of a time to a city: crime up, law enforcement resources down, faith in the future down among residents, thousands of businesses (and likely thousands of residents) fleeing the city for their own safety, taking jobs and tax revenue with them.  Do not rule out Portland as the next big city to go bankrupt, their numbers are impressive and have all of the earmarks of an impending financial death spiral.

Enough numbers for today: the same cities and states still heading for bankruptcy, delusional politicians in Seattle and elsewhere, and Social Security and Medicare still heading down the drain. Politicians may lie but numbers do not.


Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:
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Wednesday, June 1, 2022

June, 2022, By The Numbers: Gas Prices Through The Roof, Federal Government Debt Through the Roof, and Homeless Idiocy In San Francisco Through The Roof

 On a periodic basis we do some posts that fall under the theme of “by the numbers.” Rather than trust what the American political tells us about reality, we like to examine the real numbers and the real reality in the world to understand what is actually going on. Relying on politicians, and their cohorts in the media, to tell us what is reality is always a sucker bet. They have their own agendas and goals, usually centering around their needs and self-enrichment. So we need to look at the reality of the numbers to determine what is really going on.

Previous analyses of “by the numbers” can be accessed by entering the phrase in the search box above. This is the third and final post this month where we look at the numbers to truly find out how good, not likely, or bad, most likely, the American political class is doing in managing our tax dollars, protecting our freedoms, and resolving major issues that affect all of us. 


1) We have often discussed the fatalistic budget and spending numbers of the Federal government. The Washington political class has run up a national debt that is now over $30 TRILLION. The Congressional Budget office estimates that in addition to this $30 trillion debt load, they predict that the amount of unfunded liabilities, future expenses that the government has no idea how to fund, mostly for future Social Security and Medicare expenses, is over $80 TRILLION.


Consider a few numbers and calculations:


  • In 2021, the IRS processed about 168 million tax returns from American citizens.

  • That means each American taxpayer would have to write a check for about $179,000 just to pay off the CURRENT national debt.

  • In reality, they would have  to pay more since every day the Federal government spends more money than it collects.

  • To pay off the $80 trillion in unfunded future liabilities, each American taxpayer would have to pay about $476,000 more in taxes.

  • Thus, to dig the Federal  government out of its debt hole that the Washington political establishment has created, every American taxpayer would have to lay out $655,000 to pay off the current debt and future unfunded liabilities.


Obviously, that math is not possible, American households have nowhere near that amount of wealth available to pay off the debt. Taxing businesses to pay off the debt and liabilities would also not be feasible since: 1) there is not enough taxable revenue in the American business world to cover that debt and 2) even if there was, for businesses to stay in business to pay that amount of taxes would require them to raise prices to astronomical heights creating runaway inflation.


Taxing the rich, a rallying cry of liberal politicians would not work  either. For example, in 2021, according to Forbes, Jeff Bezos of Amazon fame was the richest American with a net worth of about $200 million. If you confiscated, not taxed, his entire wealth then the $200 billion would pay off about .7% of the national debt and about ,25% of the unfunded liabilities. If you only taxed his wealth at say 2% of the total amount, an actual proposal by some liberal Washington politicians, then you would pay off about .01% of the current national debt .005% of the unfunded liabilities.


The bottom  line is that the amount of debt being run up by Washington politicians is unsustainable, not possible to be paid off, and will eventually crash our economy and our democracy if changes are not made to government spending.


All of this lead us to the latest, and horrible, numbers that were recently crunched by the Congressional Budget Office:


  • If nothing changes in Washington, the Congressional Budget Office predicts that the Federal government will be spending over $1 trillion every fiscal year for the foreseeable future beyond what it collects in taxes.

  • For the next decade, the annual government spending deficit will average $1.6 trillion.

  • This means that the Federal  government will on average spend $43 million a DAY that it cannot cover with current tax collections.

  • If nothing changes, the Congressional Budget Office predicts that the 2032 annual government spending deficit will be $2.3 trillion.

  • These deficits over the next ten years are projected to be worth 5.1% of the gross domestic product (GDP), the value of everything the entire U.S. economy produces. 

  • Over the last 50 years, the annual federal deficit has averaged 3.5% of GDP.

  • These spending deficits are the largest in both actual and percentage of GDP that the Federal government has ever operated at.

  • The total national debt is projected by CBO to run near 100% of the country’s GDP every year, exceeding the record set by that metric during World War II. 

  • The ratio of federal debt to GDP is more than double what it was in 2000.


You get the idea. The Federal government current and future debt is out of control and outrageously high, it cannot be covered with increased taxation, and current spending trends will make the debt situation that much worse over time. Eventually programs like Social Security and Medicare will be severely cut back in a last ditch attempt by the Federal government to avoid going bankrupt and defaulting on its debt obligations which will cause severe hardships for tens of millions of Americans.


The rest of the world will eventually lose trust in the value of the American dollar, which will contribute \to already skyrocketing inflation. And the current Washington politicians still do not understand the magnitude and depth of the problem as they continue to send money overseas, give their Federal employees free Peloton exercise subscriptions, shower themselves with benefits and high  salaries, and make sure their family members, friends and political  donors get rich while the country sinks into a sea of red ink. The numbers don't lie.


2) It is certainly no secret that gasoline prices in this country have risen to ridiculous heights since Biden became President. And while he wants us to believe that the Russian/Ukraine conflict is responsible for the gas price increase, that is a ridiculous lie to try to hoist on the American public. Gas prices started rising way before that war broke out. 


In fact, gas prices started rising almost the same day that Biden took office. His killing off of the Keystone pipeline, his suspending drilling leases on Federal lands, etc., were his doing, not Putin’s doing or impacts from the Ukraine invasion. 


There is a saying that a manager I once worked for had and managed by: “Don’t tell me the seas were rough, just tell me you brought the ship safely into port.” In other words, stop bitching and start acting to remedy the situation. Obviously, Biden had no clue how to execute that saying.  Rather than bring the ship into port and eliminate crushing gas prices, he sits around trying to place the blame on others without doing anything to fix the problem.


And it is a big problem and it has happened on his watch:


  • Gas prices in this country recently hit an all time high, the average price for a gallon of gas hitting $4.60 per gallon.

  • This average is about a ghastly 92% higher since Biden took office and I would bet that at least half of that increase happened BEFORE Putin invaded Ukraine.

  • Gas is $.44 more expensive than it was last month.

  • On  Memorial Day 2021, about a year ago, the average price for a gallon of gas was $3.05 which was less than today but was still probably up 50% since the day Biden became President.


Again, if Biden was a leader he would spend less time telling us who is to blame and more time resolving the crisis, “bringing the ship safely into port,” and we all would be better off. But given that Biden was the VP in the Obama administration, an administration that spent eight years blaming everyone and everything else than themselves for their failures, his behavior is no surprise.


What is also very interesting is the numbers that occur at the state level for

 average price for a gallon of gas:


  1. Arizona: $4.95 a gallon

  2. California: $6.15 a gallon

  3. Hawaii: $5.44 a gallon

  4. Illinois: $5.00 a gallon

  5. Maine: $4.77 a gallon

  6. Nevada: $5.30 a gallon

  7. New York: $4.93 a gallon

  8. Oregon: $5.20 a gallon

  9. Washington: $5.23 a gallon


These states currently have the highest priced gas in the country. I find it interesting that states with the highest gas prices are those states that have a long tradition of being run by liberal politicians/Democrats: Washington, Oregon, New York, Maine, Illinois, Hawaii, and California. 


I  would bet on a closer look that these states also have the highest state gas taxes in the country, a double whammy on those residents in those states: high taxes on everything else, property, sales, , etc., and also gas taxes which makes the gas burden that much worse in those political blue states.


Bad times for Americans’ transportation needs and an administration  and President that are clueless on how to resolve it even though two short years ago this was not even close to being a crisis for American drivers.


3) I debated whether to put the following piece of political idiocy in this “by the numbers” post or save it for our next “political class insanity" post. I decided to go with it here since the single number it has is really a doozy:


  • London Breed is the mayor of San Francisco.

  • Her city has a tremendous homeless problem which manifests itself in public defecation, public urination, public use of illegal drugs, drug overdoses, violence, etc.

  • Her solution: spend an additional $6.5 million over five years to remedy the situation or at least alleviate it to some degree.

  • The problem: she wants the money to only alleviate homelessness of transgender people.

  • Forget helping the homeless elderly who cannot find a place to live because of Biden’s inflationary policies.

  • Forget the homeless veterans who may be suffering any number of maladies from their service and combat experiences.

  • Forget the families who may be homeless because the breadwinner lost his or her job.

  • Nope, Breed wants to spend the money only on transgender homeless people, which number only about 400, in a city with thousands and thousands of homeless people.

  • Specifically: "Transgender, non-binary, and gender nonconforming San Franciscans are eighteen times more likely to experience homelessness compared to the general population, and we know that the rates are even higher for our minority trans communities. With one of the largest TGNC populations in the country, we not only must ensure that all San Franciscans have access to housing and essential resources through continued investments, but we can show the country that we continue to be a leader on supporting and protecting our trans communities."


$6.5 million for only a certain type of citizen. Any number of problems wrong with this stupidity:


  • First off, it is probably illegal to use taxpayer money for only a certain segment of the population.

  • This approach is so easy to game,  anyone could claim they are transgender to get a peice of the $6.5 million, it is not as if you can say a transgender person has a certain skin color, a certain ethnic background, a certain DNA, a person would just be able to claim their are transgender.

  • If you do the math of $6.5 million over 5 years to serve only 400 people, it turns out that the city will theoretically be spending about $9 a day to help a homeless transgender person.

  • I doubt you can feed and shelter a person for $9 a day, about $270 a month in a high priced city like San Francisco and that assumes the $6.5 million goes directly to the homeless transgender people.

  • Once you take overhead costs out of the the $6.5 million along with government incompetence and fraud, that $9 a day goes down dramatically.


I have no idea how to handle the large and growing homeless problem in this country. But I am pretty sure helping one a small minority of those that are homeless, whatever the criteria is, does not resolve the bigger problem affecting people of all sexual orientations, genders, education backgrounds, etc. Another stupid government program as proven by some simple numbers.


Stupid spending in San Francisco, stupid and overwhelming debt driven spending in D.C., and the inability to manage an inflationary economy by Biden. The numbers don't lie even if politicians do.


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