Saturday, July 15, 2023

CBO 2023 Long Term Budget Outlook

 Read: https://www.cbo.gov/system/files/2023-06/59014-LTBO.pdf

If federal debt continued to rise in relation to GDP at the pace that CBO projects it would under current law, it would have far-reaching implications for the fiscal and economic outlook. The consequences of that high and rising debt would include the following:  There would be an elevated risk of a fiscal crisis— that is, a situation in which investors lose confidence in the U.S. government’s ability to service and repay its debt, causing interest rates to increase abruptly, inflation to spiral upward, or other disruptions to occur.

There it is.  There WILL BE a fiscal crisis, causing inflation and interest to skyrocket.  But we don't know when.  But probably before 2053, when there will be 10% of GDP annual deficits, with annual interest being 6.7% of GDP.  If the GDP in 2053 is $80 trillion per year (a wild guess), then annual interest paid will exceed $5 trillion per year. 

Endgame: US Federal Debt Interest Payments About To Hit $1 Trillion

 Read: https://www.zerohedge.com/markets/endgame-us-debt-interest-payments-about-hit-1-trillion

 if the Fed indeed keeps rates "higher for longer", the blended rate on the debt will surpass 4% in one year. That would be a complete disaster for the US, and it would mean that interest payments on total US debt of $32.3 trillion would hit $1.3 trillion within 12 months, potentially making interest on the debt the single biggest US government expenditure and surpassing social security!

According to the St Louis Fed's FRED and the BEA, the interest payments by the Federal Government have now surpassed $900 billion for the first time ever, and within a quarter will hit probably rise above $1 trillion, a historic benchmark that will probably begin the countdown to the US Minsky Moment.

My comments: I think this is overly dramatic.  The last I saw, net interest payments wouldn't exceed $1 trillion per year until FY 2029.  Still this is worth reviewing further.  

Tuesday, July 11, 2023

Deficit of $225 Billion in June 2023

 The deficit in June 2023 was $225 billion, CBO estimates—$136 billion greater than the amount recorded in June 2022. Revenues were $40 billion lower this June than they were in 2022; outlays increased by $97 billion.  The federal budget deficit was $1.4 trillion [actually $1.390 trillion] in the first nine months of fiscal year 2023, the Congressional Budget Office estimates.

Net Interest FYTD is $505 billion, thus June 2023 interest was $68 billion ($505 billion - $437 billion).  Defense Spending FYTD is $576 billion, thus June 2023 defense spending was $72 billion ($576 - $504).  Defense is still in the lead.

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On 6/30/23, the total national debt was $32.332 trillion.  One year earlier, on 6/30/22, it was $30.569 trillion.  So it increased 5.8% in one year.

Monday, July 10, 2023

Review of the Military Diet

 A few years ago, I was kind of obsessed with the Military Diet and wrote a few articles about it. I tried it again the last few days and want to share my impressions. I think I lost about 3 pounds, but final weigh in is tomorrow morning.

So I think the best way of losing weight is the keto/atkins diet but it has 3 major problems: you have to be very very strict about it, you have to eat a lot of fat (more than seems healthy), and the biggest is that it is very expensive with the steak, shrimp, bacon, hamburger, butter, mayonnaise (preferably with avocado oil), avocados, cheese, keto bread, keto protein bars, keto ice cream, organic peanut butter, etc.  I did it for over a year and had great results.  But I want to try something different that is cheaper and maybe healthier.

Enter the military diet. It seems to be a throwback to the 1970s when everyone roller skated and was a lot skinnier. I think there is more than 1 way to lose weight. And the military diet gives us a glimpse. I think there is some brilliant ideas here but also some problems.

First, note that there is no salad. This is one of the few diets in existence that forbids you from eating lettuce. Why? No one knows, because nobody knows where it came from and there is no theory behind it. But think about it. Lettuce won't automatically make you lose weight. Yea you could have your keto salad drenched in olive oil with bacon, but this is not keto.  This is also not the volumetrics diet, you aren't trying to fill your stomach. And how would you eat it, with French dressing (lots of sugar) and croutans? So forget the salad.

What about veggies then, maybe you are eating tomato slices, cauliflower, celery sticks, carrots, sliced cucumbers, sugar snap peas etc. I can already envision the ranch dressing.  Nope. On this 3 day diet, out of 9 meals, the only veggies you eat are 1 cup of green beans, one cup of broccoli and 1/2 cup of carrots. 

There is a lot of fruit. Grapefruit (1/2), bananas (1/2 at a time), apples, one version has melon. I am not used to eating fruit so this is different.

And the ice cream. Every night you are required to eat ice cream. This is the only diet in the world that has ice cream on it. And not keto ice cream, the real stuff with sugar. But it has to be vanilla. How this works is portion control. I bought a 12 pack of Bluebell ice cream in 3 ounce cups, each cup is 160 calories.  And I ate it 2 nights in a row with 1/2 a banana. I feel enlightened. But I will skip it tonight because it is the last night. I think I get the Zen of the diet a little.

To be continued. I will explain how to improve it.

Debt to the Public hits $25.5 Trillion

 On July 5, 2023, the debt to the public was $25,519,177,294,520.73. It seems like it was just last month that we hit $25 trillion.