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.