Another Projection

 So I did another projection and it is almost identical to the previous one.  There is definitely a danger threshold in 2043 when the debt to the public exceeds $86 trillion.

There are 2 basic problems with the finance of the United States.  First, the Social Security costs will increase once the SS trust fund is depleted about 2034.  Second, is interest rates on an increasing balance.  Right now, net interest on the national debt is about 2% of GDP.  This will exceed 5% by about 2041, and then 8% by 2053.  Right now the total deficit is about $1.5 trillion per year, but it will exceed $5 trillion per year by 2042.

US national debt on pace to be 225% of GDP by 2050

 https://www.foxbusiness.com/economy/us-national-debt-pace-gdp-2050-penn-wharton-says

The findings from the Penn Wharton Budget Model, a nonpartisan group at the University of Pennsylvania's Wharton School, found that under current law, the national debt will rise to 225% of U.S. GDP by 2050. 

"Current U.S. fiscal policy is in permanent imbalance as current debt plus projected future spending outstrips future tax revenue," the analysis said. "Achieving fiscal balance would require the federal government to permanently increase tax revenues by over 40% or reduce expenditures by 30% or some combination of both."

Here is the link to the study: https://budgetmodel.wharton.upenn.edu/issues/2022/12/19/long-term-implications-of-current-budget-policies

Deficit of $248 Billion in November 2022

The federal budget deficit totaled $335 billion in October and November 2022, the first two months of fiscal year 2023, the Congressional Budget Office estimates. The federal government incurred a deficit of $248 billion in November 2022, CBO estimates—$56 billion more than the deficit recorded last November.  https://www.cbo.gov/publication/58756/html

How much was interest?  In October 2022, the US spent $43 billion in net interest, which is the 4th largest category, behind Social Security, National Defense, and Health.  

In November 2022, the US spent $50 billion in net interest, for a total of $93 billion fiscal year to date. 

How does this compare to projections?  The last official projections I saw show a $542 billion primary deficit in FY 2023 and $442 billion in net interest for a total of $984 billion projected for the year.  It looks like this will be blown out of the water.

Deficit of $1.4 trillion in FY 2022

In fiscal year 2022, which ended on September 30, the federal budget deficit totaled nearly $1.4 trillion.  The deficit for September was $430 billion, primarily because of student debt relief.  The deficit for October was $83 billion.

https://www.cbo.gov/publication/58592/html

On 10/3/22, the national debt exceeded $31 trillion for the first time in history.  I expect it to cross $32 trillion about July 1, 2023.

When did it first exceed $15.5 trillion?  On about 3/8/12.  So it doubled in the last 9.5 years.  So this should be at $62 trillion in 2031.

Update 12/8/22: The net interest on the debt increased 29% YOY from FY2021 to FY2022, from $413 billion to $534 billion.  At this rate, it will double every 3 years. The principal is going up as well as the rate in a doom feedback loop. Will it exceed $1 trillion in 2025?

Deficit of $217 Billion in August 2022

 See https://www.cbo.gov/publication/58416/html

The federal government incurred a deficit of $217 billion in August 2022, CBO estimates—$47 billion more than the deficit recorded last August. The federal budget deficit was $944 billion in the first 11 months of fiscal year 2022 (that is, from October 2021 through August 2022), the Congressional Budget Office estimates—$1.8 trillion less than it was at the same point last year.

So $1.8 trillion less sounds good, but this is based on about $800 billion of new receipts and only $900 billion of less spending.  When the next recession hits, which could be next year, we could be looking at a $2 trillion deficit.

Also, the national debt is right at $30.9 trillion, and it should hit $31 trillion next week when the new fiscal year begins.

The Public debt hits $24 Trillion

 On 8/9/2022, the public debt hit $24,027.

It first hit $23 trillion on 12/28/21, and $22 trillion on 4/29/21.  So about every 8 months it goes up another trillion.

When did it first hit $12 trillion?  On 10/17/13.  So the doubling time on this slightly less than 9 years.  At this rate, it will hit $48 trillion by 8/1/2031.  Who cares?  Well, I theorize that there is an absolute limit before the whole thing explodes, and that limit is about $85 trillion and we should hit it about 2043.  So anything we can do to push this out is good.

Unfortunately, if we go into another recession, which we might by the beginning of next year, the only tool the economists know is more spending.  So there could be another $5 trillion spending bill in 2023 or 2024, which will increase the debt dramatically and move the day of reckoning up.

Deficit of $212 Billion in July 2022

https://www.cbo.gov/publication/58266/html 

The federal government incurred a deficit of $212 billion in July 2022, CBO estimates—$90 billion less than the deficit recorded last July.

The federal budget deficit was $727 billion in the first 10 months of fiscal year 2022 (that is, from October 2021 through July 2022), the Congressional Budget Office estimates—$1.8 trillion less than it was at the same point last year.  Revenues were $789 billion (or 24 percent) higher and outlays were $1.0 trillion (or 17 percent) lower than they were during the same period a year ago.

Instead of comparing it to 2021, how about 2019, before the pandemic?  In 2022 fiscal year-to-date (through 7/31/22) revenues were 4,107 and expenditure were 4,835, for a deficit of 727, billion that is.

In 2019 through 7/31/2019, revenues were 2,860 and expenditures were 3,727 for a deficit of 867.  Interesting.

Crisis in 2043

 

About once a year, I do a forecast of the debt.  I arbitrarily set a limit of 150% of debt to GDP, and see that this will be exceeded in 2043.  This is better than last year's danger signal of 2041.  We can see that it is theoretically still possible to slow this ship before it crashes.  This is because the GDP numbers look much better than last year's forecasts, although this is primarily due to inflation.  Also, my interest forecasts may be too high.

I am not trying to be pessimistic, only realistic.  It does seem like my worst case scenario could be avoided.  To do this requires increasing GDP - to grow our way out the debt.  This would need increases of 3%+ plus on average, not adjusted for inflation.  Also keep the primary deficit under 3% of GDP and keep average net interest costs under 3%.  Lots of 3s there.  Maybe this sucker isn't going down - to paraphrase W.

The 2022 Long-Term Budget Outlook

 See https://www.cbo.gov/publication/57971

in CBO’s projections, federal deficits over the 2022–2052 period average 7.3 percent of GDP (more than double the average over the past half-century) and generally grow each year, reaching 11.1 percent of GDP in 2052. That projected growth in total deficits is largely driven by increases in interest costs: Net interest outlays more than quadruple over the period, rising to 7.2 percent of GDP in 2052. Primary deficits—that is, deficits excluding net outlays for interest—grow from 2.3 percent of GDP in 2022 to 3.9 percent in 2052.

Update:  See also The 2021 Long-Term Budget Outlook and 2020 Long-Term Budget Outlook

The latest 2022 long-term budget outlook is more favorable than the previous ones.  The long-term outlook shouldn't change much in just one year, so I think it would be interesting to compare these.

New Project Bluebook

 Project Blue Book was the code name for the systematic study of unidentified flying objects by the United States Air Force from March 1952 to its termination on December 17, 1969. 

The new project is called the AARO (All-domain Anomaly Resolution Office).

"The mission of the AARO will be to synchronize efforts across the Department of Defense, and with other U.S. federal departments and agencies, to detect, identify and attribute objects of interest in, on or near military installations, operating areas, training areas, special use airspace and other areas of interest, and, as necessary, to mitigate any associated threats to safety of operations and national security. This includes anomalous, unidentified space, airborne, submerged and transmedium objects."

  https://www.defense.gov/News/Releases/Release/Article/3100053/dod-announces-the-establishment-of-the-all-domain-anomaly-resolution-office/

"The AARO will serve as the authoritative office of the Unidentified Aerial Phenomena (UAP) and UAP-related activities for the DoD".  UAPs of course is what we are calling UFOs these days.

Is 2022 similar to 1973?

I think before I have made the analogy that Trump is like Nixon, and Biden is like Carter.

What made me think of this now is this article:  David Stockman: How the Fed fostered double-digit inflation…..again!  "We don’t really care if June marked the inflation peak or not. Yesterday’s revelation that wholesale (PPI) commodity prices rose by 23.4% on a Y/Y basis in June is the far more important data point. The only competitor during the past three-quarters century was the very same 23.4% Y/Y gain registered in November 1974 on the heels of the Arab oil embargo and the Fed’s money-pumping spree during Nixon’s last years in office."

Look at the stock market crash of 1973-1974.  "In the 694 days between 11 January 1973 and 6 December 1974, the New York Stock Exchange's Dow Jones Industrial Average benchmark suffered the seventh-worst bear market in its history, losing over 45% of its value."

The current crash also started in January.  On January 3, 2022, the DJIA reached its all time high of 36,800 and it has declined about 13% since then.

The 1973-1974 recession lasted from November 1973 to March 1975.  We know a recession is coming we don't know when (or if it has already started).  But if there is a 49 year cycle, then we can expect a recession to begin in November 2022 and last until March 2024.  And of course, a recession means that the Treasury will issue trillions in new debt and the Fed will print trillions of new electronic dollars, which will mean more inflation.

Let's look at inflation rates in the 1970s.  The 1973 inflation rate was 6.22%.  The 1974 rate was 11.04%, and the 1975 rate was 9.13%.  The 2022 inflation rate is currently at 9.1%.   

I think I proved my point.  The 70s are back, baby.  Are there any other parallels, like in cultural trends?  

Deficit of $88 Billion in June 2022

 https://www.cbo.gov/system/files?file=2022-07/58219-MBR.pdf

The federal government incurred a deficit of $88 billion in June 2022, CBO estimates— $86 billion less than the deficit recorded last June. 

The federal budget deficit was $514 billion in the first nine months of fiscal year 2022 (that is, from October 2021 through June 2022), the Congressional Budget Office estimates. That amount is less than one-quarter of the $2.2 trillion shortfall recorded during the same period in 2021. Revenues were $779 billion (or 25 percent) higher and outlays were $945 billion (or 18 percent) lower than during the same period a year ago. 

When a recession is not a recession

 Read: https://www.forbes.com/sites/billconerly/2022/07/05/already-in-recession-close-but-not-quite-in-july-2022/

The Bureau of Economic Analysis just announced that GDP dropped 1.6% in the 1st quarter of 2022.  The GDPNow model of the Atlanta Fed estimated that real GDP growth declined 2.1% in the 2nd quarter of 2022.  Two quarters of declines in GDP means that we are in a recession, right?

Not so fast.  We aren't in a recession until "Simon" says.  In this case, Simon is the National Bureau of Economic Research, and until they officially say so, there is no recession.  They wait until a recession is almost over before retroactively declaring that it occurred.  So they won't say for another 6 to 12 months.  

So don't worry, be happy.  We aren't officially in a recession.

Deficit of $63 Billion in May 2022

 https://www.cbo.gov/system/files/2022-06/58111-MBR.pdf

The federal budget deficit was $423 billion in the first eight months of fiscal year 2022.

New CBO Projections 2022-2032

 The CBO released their latest projects for 2022-2032.  It shows that the Federal Government will not exceed $40 trillion in debt held by the public until 2032.  I will analyze this more later, but wanted to make a note of it.

Surplus of $308 Billion in April 2022

The federal government realized a surplus of $308 billion in April 2022, CBO estimates—a change from the $226 billion deficit recorded last year. The federal budget deficit was $360 billion in the first seven months of fiscal year 2022 (that is, from October 2021 through April 2022), the Congressional Budget Office estimates.  Monthly Budget Review: April 2022 (cbo.gov)

In Defense of Papyrus Font

 Here is a very interesting article about the use of the Papyrus font in the title of the movie Avatar.

In Defense of Papyrus: Avatar Uses the World's Second-Most-Hated Font to Signal the Downfall of Civilization (designforhackers.com)

Material dishonesty is a symptom of cultural illness. Material honesty is the pursuit of one thing, at the expense of everything else. This is why material dishonesty matters, and this is Why You Hate Papyrus. In the movie Avatar, the Na’vi are fooled by the false representations of themselves, and it leads to tragedy. You don’t only see material dishonesty in your furniture, and your bathroom tile. Material dishonesty seeps into every nook and cranny of civilization.

In robotics, there is a concept called the “uncanny valley.” This is the phenomenon that we are okay with humanoid figures that either look perfectly lifelike – a feat yet to be accomplished – or that take on their own characteristics, like a cartoon character; or a Na’vi, for that matter. Anything in that valley between caricature and reality creeps us the fuck out. Anything between those two peaks is in the uncanny valley. There are a number of theories about why humanoid figures in the uncanny valley make us uncomfortable. Some think they remind us of our mortality. Others believe they trigger the same reaction that would make us avoid someone sick with a contagious disease. But I think there’s a more important reason: It’s that we’re evolutionarily wired to be averse to deception. Not only are we averse to deception, but it also worries us when others aren’t attuned to deception.

Deficit of $191 Billion in March 2022

 The federal government incurred a deficit of $191 billion in March 2022, CBO estimates—about one-third of the deficit recorded last March. CBO estimates that receipts in March totaled $315 billion—$47 billion (or 18 percent) more than in March 2021, largely driven by individual income and payroll tax collections, which increased by $44 billion (or 20 percent). In addition, remittances from the Federal Reserve rose by $5 billion (or 59 percent). Partially offsetting those increases, collections of corporate income taxes decreased by $5 billion (or 36 percent). Total spending in March 2022 was $506 billion, CBO estimates—$421 billion (or 45 percent) less than last year.

The federal budget deficit was $667 billion in the first six months of fiscal year 2022 (that is, from October 2021 through March 2022), the Congressional Budget Office estimates. That amount is roughly 40 percent of the shortfall recorded during the same period in 2021 ($1,706 billion). Revenues were $418 billion (or 25 percent) higher and outlays were $622 billion (or 18 percent) lower than during the same period a year ago.  https://www.cbo.gov/system/files/2022-04/57909-MBR.pdf

 My comment:  The CBO tries to make this seem really good and a dramatic improvement over FY2021, but the deficit will still probably be the 3rd worse ever, behind 2020 and 2021.  In 2009 during the Great Recession, the deficit was $1,413 billion, and the deficit will probably be worse than that this fiscal year.

https://www.youtube.com/watch?v=CjRas1yOWvo 

Time It needs time 

To win back your love again I will be there

Deficit of $216 Billion in February 2022

The federal government incurred a deficit of $216 billion in February 2022, CBO estimates—a $95 billion improvement over the deficit recorded last February.

The federal budget deficit was $475 billion in the first five months of fiscal year 2022, the Congressional Budget Office estimates. That amount is less than deficits recorded during the same period in the two prior fiscal years: It is less than half the shortfall recorded for the same months in fiscal year 2021 ($1,047 billion) and three-quarters of the deficit recorded in 2020 ($624 billion), just before the start of the coronavirus pandemic. From October 2021 through February 2022, revenues were $371 billion (or 26 percent) higher and outlays were $201 billion (or 8 percent) lower than they were during the same period a year ago, CBO estimates.  https://www.cbo.gov/system/files/2022-03/57841-MBR.pdf

Ukraine is trying to start World War III

 https://www.zerohedge.com/news/2022-03-08/ukraine-trying-goad-us-world-war-iii

The reason we know Ukrainian officials are trying to goad the US into war is because that’s exactly what they say they’re doing. There is no ambiguity here — at this very moment, a furious multi-front lobbying blitz is underway to solicit full-fledged US military intervention in Ukraine, and therefore open warfare against Russia. To put it bluntly, a foreign country’s representatives are doing all they possibly can to instigate the closest thing anyone on Earth has ever experienced to World War III.

My comments: The US should tell Zelensky to shut up and should reach agreement with Russia on the partitioning of Ukraine.  Since I don't think that is going to happen, World War III is inevitable.  And it won't be limited to conventional warfare in Ukraine - it will likely involve nukes.  

Budget Surplus of $119 Billion in January

The fiscal year to date (from Oct 1, 2021 to Jan 31, 2022) deficit dropped to $259 billion. 

https://www.cbo.gov/system/files/2022-02/57759-MBR.pdf

What is MDM?

Misinformation, disinformation, and malinformation make up what CISA defines as “information activities”. When this type of content is released by foreign actors, it can be referred to as foreign influence. Definitions for each are below.

• Misinformation is false, but not created or shared with the intention of causing harm.

• Disinformation is deliberately created to mislead, harm, or manipulate a person, social group, organization, or country.

• Malinformation is based on fact, but used out of context to mislead, harm, or manipulate.

Foreign and domestic threat actors use MDM campaigns to cause chaos, confusion, and division. These malign actors are seeking to interfere with and undermine our democratic institutions and national cohesiveness. 

As COVID-19 spread around the globe, mis-, dis-, and malinformation (MDM) spread as well. COVID-19-related MDM activities seek to undermine public confidence and sow confusion. COVID-19 has demonstrated that a rapidly evolving event creates opportunities for adversaries to act maliciously. It also shows that rapid evolution of accurate information makes older, dated information a potential catalyst of confusion and distrust as well. The MDM team supports the interagency and private sector partners’ COVID-19 response efforts via regular reporting and analysis of key pandemic-related MDM trends.

Source: https://www.cisa.gov/mdm

See also: https://www.dhs.gov/ntas/advisory/national-terrorism-advisory-system-bulletin-february-07-2022

The United States remains in a heightened threat environment fueled by several factors, including an online environment filled with false or misleading narratives and conspiracy theories, and other forms of mis- dis- and mal-information (MDM) introduced and/or amplified by foreign and domestic threat actors. These threat actors seek to exacerbate societal friction to sow discord and undermine public trust in government institutions to encourage unrest, which could potentially inspire acts of violence.

Question:  What about the First Amendment?  Has the constitution been suspended because of Covid?

Update:  

This looks very entertaining:

https://www.cisa.gov/resilience-series-graphic-novels

CISA has made two comic books explaining what MDM is.  The titles are: "Real Fake" and "Bug Bytes".

The National Debt hits $30 Trillion

 On 1/31/2022, the National Debt hit $30 Trillion.

Let's look at the previous milestones:

12/16/2021 $29 Trillion

3/31/2021 $28 Trillion

10/1/2020 $27 Trillion

6/9/2020 $26 Trillion

5/5/2020 $25 Trillion 

4/7/2020 $24 Trillion 

11/7/2019 $23 Trillion

2/11/2019 $22 Trillion

3/15/2018 $21 Trillion

9/8/2017 $20 Trillion

I started this blog many moons ago because I was worried about the skyrocketing debt.  One of my first blog entries, on June 20, 2010, complained that the national debt was excessive at $13 Trillion.  

What is the doubling-time of the debt?  It was $15 Trillion on 11/15/2011.  So about 10 years.  So we can expect the National Debt to hit $60 Trillion on about 2/1/2032.

The budget deficit in December was $20 billion

 The federal government incurred a deficit of $20 billion in December 2021, CBO estimates— $123 billion less than the deficit in December 2020.  https://www.cbo.gov/system/files/2022-01/57667-MBR.pdf

Wow, that's some unexpected good news.  Why is it so low?

CBO estimates that receipts in December 2021 totaled $486 billion—$140 billion (or 41 percent) more than those in the same month last year.  Total spending in December 2021 was $507 billion, CBO estimates—$17 billion more than in the same month last year.

So taxes are higher.

Debt to the Public hits $23 Trillion

 As of 12/30/21, the last business day of 2021, Debt to the Public was $23.033 trillion.

The Debt to the Public was at $22 trillion on 4/29/21, $21 trillion on 9/30/2020, $20 trillion on 6/3/2020, $19 trillion on 4/30/2020, $18 trillion on 4/7/2020 and $17 trillion on 11/7/2019.

We can expect it to increase by one trillion about every 6 months.

The total debt, which includes intragovernmental debt, is at $29.494 trillion, but should hit $30 trillion within a couple of months.