More Smith Family Adventures

 

Source: https://www.mmted.org/smithfamily/

Hey kids, read this cartoon to be entertained and propagandized.  The government can create money just as easily as pressing a button!  (Just don't ask why we need to pay taxes).

The arrest of Richard Medhurst

Richard Medhurst is a British journalist who has reported on Julian Assange and the war in Gaza. 

Read: https://www.zerohedge.com/geopolitical/pcr-western-world-has-succumbed-tyranny

My name is Richard Thomas Medhurst. I am an internationally accredited journalist from the United Kingdom. On Thursday, as I landed in London Heathrow airport, I was immediately escorted off the plane by 6 police officers who were waiting for me at the entrance of the aircraft. They arrested me—not detained—but arrested me under Section 12 of the Terrorism Act of 2000 and accused me of allegedly “expressing an opinion or belief that is supportive of a proscribed organization” but wouldn’t explain what this meant.

This is precisely the danger and absurdity of the Terrorism Act that I have always sought to impress upon the public, long before I ever became a victim of it myself. It is out of control and has no place in a democracy. Counter terrorism laws should be used to fight actual terrorism, not journalism. We cannot call ourselves a democracy as long as reporters are dragged off of planes and detained and treated like murderers.

2023 Financial Report of the United States Government

 https://www.fiscal.treasury.gov/files/reports-statements/financial-report/2023/02-15-2024-FR-(Final).pdf

This was issued on February 15, but I haven't noticed it this year.  The key thing I notice is accrued liabilities of $14.3 trillion for Federal Employee & Veteran Benefits Payable.  

 The total liabilities as of 9/30/23 were $42.9 trillion.  Compare this to the National Debt of $33.2 trillion as of 9/30/23. The National Debt includes the Intragovernmental Holdings of $6.8 trillion (as of 9/30/23) but excludes other liabilities.  The Total Liabilities on the Balance Sheet includes the $14.3 trillion for FEVBP plus another $2.2 trillion for other, but excludes the Intragovernmental Holdings.

The projections based on this Financial Report’s assumptions indicate that current policy is not sustainable. The debt-to-GDP ratio was approximately 97 percent at the end of 2023, which is similar to (but slightly above) the debt-to-GDP ratio at the end of FY 2022. If current policy is left unchanged, the projections show the debt-to-GDP ratio will be approximately 100 percent in 2024, exceed 200 percent by 2047 and reach 531 percent in 2098. For comparison, under the 2022 projections, the debt-to-GDP ratio exceeded 200 percent one year earlier in 2046 and reached 566 percent in 2097.

So there it is, 200% is the ratio to use and this will be exceeded in 2047.  We have 23 years left before the whole thing blows up.

The US government has to start paying for things again

 This is a pretty good article by Vox: https://www.vox.com/policy/367278/us-national-debt-gdp-government-inflation-solutions-recession

Smetters and his colleague Jagadeesh Gokhale have after extensive modeling concluded that if US debt held by the public exceeds 200 percent of GDP, we’ll be entering a phase where no amount of tax hikes or spending cuts will be sufficient to avoid default. We’ll either have to explicitly say we will not pay back all our debt, or else inflate it away, both of which would have massive negative consequences for American workers and consumers. They estimate that the US will reach this point in about 20 years.

Note: I have used a 150% of GDP.  I am ok with using 200% of GDP so long as it includes other liabilities, not just the public marketable debt.

The Public Debt hits $28 Trillion

 On 8/13/2024, the Debt to the Public hit  $28,017,164,049,453.46.

One year prior on 8/31/2023, the Debt to the Public hit  $26,044,050,577,584.54.

One year prior to that, on 8/9/2022, it hit $24,027,688,178,378.89.

Slightly more than one year prior to that, on 4/29/21, it hit  $22,056,055,138,417.67.

Slightly less than one year prior to that, on 6/3/2020, it hit $20,031,292,630,338.74.

Are you noticing a pattern?  So we should hit $30 trillion in August of 2025 and $32 trillion in August of 2026 and so forth.

When did the public debt first hit $14 trillion? On 12/31/14.  So the doubling time is slightly less than 10 years.  So in 2034, this should hit $56 trillion.

===============

GDP is now $28.6 trillion, so the debt to GDP ratio is 97.9%.

One year ago, debt to the public was $26 trillion and GDP was $26.8 trillion, so the ratio then was 97.0%.  So it increased 0.9% in one year.  

The Magical Money Tree will cure the recession

 

Hey kids, a new season of The Smith Family has arrived.  Learn all about how when a recession hits, the solution is for the government to spend lots of money and go deeper into debt.  Because money really does grow on a magical tree!  You can borrow as much as you want and it never has to be paid back!

The deficit in July 2024 was $242 Billion

 The deficit in July 2024 was $242 billion, CBO estimates—compared with a $221 billion deficit recorded in July 2023.  The federal budget deficit was $1.5 trillion [actually $1,510 billion] in the first 10 months of fiscal year 2024, the Congressional Budget Office estimates—$103 billion less than the deficit recorded during the same period last fiscal year. Revenues were $397 billion (or 11 percent) higher and outlays were $293 billion (or 6 percent) higher from October through July than they were during the same period in fiscal year 2023. https://www.cbo.gov/system/files/2024-08/60479-MBR.pdf

Net Interest in July 2024 was $82 billion (782 - 705), up from $68 billion in July 2023.

On 7/31/2024, the national debt was $35.095 trillion, up from $32.61 trillion on 7/31/2023, so it increased 7.6% in one year.

The Federal Reserve now has a deficit of $186.3 billion (as of 7/31/24) compared to $178.5 billion (as of 6/26/24), an increase of $7.8 billion for the month.  See https://fred.stlouisfed.org/series/RESPPLLOPNWW  This is crazy - the Fed has phantom assets on their books and is paying interest to finance them.

Poor little rich kid

Guy buys a Porsche Taycan, because he loves Porsches, and EVs are the future.  Brand new, the vehicle was $200k, but he gets it used as a 2021 (with only 6k miles), and pays "only" $110k.  He brings it to the shop to fix something else and they notice a tiny dent on the underside.  It damaged the battery, and it will cost $72k to fix, thus totalling the car.  Poor guy.

https://www.taycanforum.com/forum/threads/underbody-protection-panel-damaged-batteries-and-coolant-lines-need-inspection-72-5k-replacement-labor-cost-dealership-is-tom-wood-in-indiana.20407/

Update:  It will only cost him $44k to replace the battery, and it is covered by insurance.  His premiums are probably going to go up.

National Debt hits $35 Trillion

 On 7/26/24, the national debt hit $35,001,278,179,208.67.  When was it $17.5 trillion? On 3/11/14, so the doubling time is just over 10 years.  So in 2034, we can expect this to hit $70 trillion.

The GDP is currently at $28.6 trillion, so the National Debt to GDP ratio is at 122%.

JD Vance and Vivek Ramaswamy

 JD Vance is Trump's pick for VP.  He was born August 2, 1984 (with the name James Donald Bowman, then it was changed to James David Hamel) in Middletown, Ohio (a suburb of Cincinnati) and he graduated from Ohio State University (in Columbus) in 2009.  He went to Yale Law School and graduated with a JD in 2013. He co-founded a hedge fund, Varya Capital (in Cincinnati) before becoming a US Senator from Ohio in 2022.  He married Usha Chilukuri (a Hindu woman) in 2014, who also graduated from Yale Law School in 2013, and they have 3 children, including 1 named Vivek. (He changed his name to JD Vance in 2014 when he got married).  He converted to Catholicism in 2019.

Vivek Ramaswamy was born August 9, 1985 in Cincinnati, OH to Hindu immigrant parents and he attended St Xavier High School, which is Jesuit Catholic.  He graduated from Harvard in 2007.  He went to Yale Law School, where he was friends with then JD Hamel, and graduated with a JD in 2013.  He founded a biotech company, Roivant Sciences, in 2014.  In 2015, he married Apoorva Tewari (a Hindu woman), who graduated from Yale Medical School, and they have 2 children.  He first got involved in politics in 2023 when he ran for president as a Republican, before ultimately endorsing Trump.  He is a Hindu but he tried to appeal to Christian evangelicals by saying that the US was founded on Christian values and he believes in one God.

The two men are practically twins, they are so similar.

 

​

2Q GDP is $28.6 Trillion

Current‑dollar GDP increased 5.2 percent at an annual rate, or $360.0 billion, in the second quarter to a level of $28.63 trillion. In the first quarter, GDP increased 4.5 percent, or $312.2 billion.  https://www.bea.gov/news/2024/gross-domestic-product-second-quarter-2024-advance-estimate

Debt to the Public was $27.613 trillion as of 6/30/24, so that makes a ratio of 96.4%.

One year ago, on 6/30/23, the revised GDP was $27.06 trillion, and debt to the public was $25.462 trillion, so the ratio then was 94.1%.

So, the debt increased $2.1 trillion, but GDP increased only $1.57 trillion.

================

Update:

Current‑dollar GDP increased 5.5 percent at an annual rate, or $383.2 billion, in the second quarter to a level of $28.65 trillion. https://www.bea.gov/news/2024/gross-domestic-product-second-estimate-corporate-profits-preliminary-estimate-second.

Comment: Everyone seems really focused on this, but it is only a $23 billion adjustment upward.

What if Trump wins? An interactive game

From https://whatiftrumpwins.org/

You can only prepare for what you can imagine. Denial won’t help. So let’s be brave. 

 What if Trump (or Biden) wins? Explore the world of “what if” with this interactive pick-your-own-path adventure. Your character helps grow the resistance. Can you guide us towards a better, more humane democracy?

Start Your Journey

(I have not played this.  It looks kind of stupid, but a little interesting.)

Parallels between 1968 and 2024

In 1968, there was an incumbent Democratic president (Lyndon B Johnson) who was unpopular, and a war (in Vietnam) that was unpopular. Robert F Kennedy was assassinated on June 6, 1968. The Democrats held their convention in Chicago from August 26-29, which had massive protests.  The Republican candidate (Richard Nixon) was elected president on Tuesday, November 5, 1968.

In 2024, there is an incumbent Democratic president (Joe Biden) who was unpopular, and wars (in Palestine and Ukraine) that seems to be unwinnable.  There was an attempt to assassinate Donald Trump on July 14, 2024.  The Democrats will hold their convention in Chicago from August 19-22.  There may or may not be protests.  RFK Jr is running as an independent candidate. And the Republic candidate may win on Tuesday, November 5, 2024.

Are there any other parallels?

Projected GDP

 My source for this is the latest 10-year Economic Projection (from June 2024).  This is their data through 2034, except I rounded it to the nearest 100 billion.  They are using 3.8% as a long term growth factor, so after 2034, the numbers increase each year that.  This only runs through 2054 because it is pointless to project out further, even though it is fun to do so.  You could plug these numbers into my deficit forecasting model, since most of those are based on percents of GDP.

2024	28,500
2025	29,700
2026	30,900
2027	32,000
2028	33,100
2029	34,300
2030	35,700
2031	37,000
2032	38,400
2033	39,900
2034	41,400
2035	43,000
2036	44,600
2037	46,300
2038	48,100
2039	49,900
2040	51,800
2041	53,800
2042	55,800
2043	57,900
2044	60,100
2045	62,400
2046	64,800
2047	67,300
2048	69,900
2049	72,600
2050	75,400
2051	78,300
2052	81,300
2053	84,400
2054	87,600

See also https://aftermath2022.blogspot.com/2024/01/projected-nominal-gdp-through-2100.html for a more optimistic forecast.

Deficit of $73 Billion in June 2024

 The deficit in June 2024 was $73 billion, CBO estimates—compared with a $228 billion deficit recorded in June 2023.  The federal budget deficit was $1.3 trillion [actually $1.275 trillion] in the first nine months of fiscal year 2024, the Congressional Budget Office estimates—$118 billion less than the deficit recorded during the same period last fiscal year. Revenues were $342 billion (or 10 percent) higher and outlays were $225 billion (or 5 percent) higher from October through June than during the same period in fiscal year 2023.  https://www.cbo.gov/system/files/2024-07/60361-MBR.pdf

Net interest for June 2024 was $83 billion ($705 - $622),  This is up from $58 billion in June 2023.

On 6/30/24, the national debt was $34.832 trillion.  On 6/30/23, it was $32.332 trillion.  So it increased 7.7% in one year.

The Federal Reserve now has a deficit of $178.5 billion (as of 6/26/24), up from $171.9 billion (as of 5/29/24), an increase of $6.6 billion for the month.  This is not included in the national debt above.  (As long as this number stays below about $200 billion, it is not really a cause for concern).

Will Kamala Harris and Gretchen Whitmer win in November?

I am trying to focus only on economics, not on politics, but I have to mention this.  It is based not on my personal beliefs or preferences but what I think is the most likely scenario.

I saw this posted online somewhere and now I can't find the source, so take this as pure speculation.  Someone who claimed to be a Democratic party insider says that Biden will resign soon, and Kamala Harris will become president and 2024 nominee and Gretchen Whitmer will be the vice presidential candidate, thus presenting an all-female ticket.  Add in a little voting manipulation in a few key counties in the early morning of November 6, and boom, you have a new woman Imperial President.  Some people might have a little problem with this.

Actually, if this happens, there may be a civil war.  I hope not, but this seems inevitable.  

=========

Read: https://www.cnn.com/2024/07/05/opinions/kamala-harris-gretchen-whitmer-winning-ticket-zelizer/index.html

The Supreme Court's conservative opinions

 This is a list of cases decided since June 1 that show the conservative/liberal 6-3 split, although some of them are 5-4.  One of these, Loper Bright, is huge because it overturns Chevron deference.  All of these deserve more study.

Garland v. Cargill, 602 U.S. 406

Campos-Chaves v. Garland

Diaz v. United States

Department of State v. Muñoz

Snyder v. United States

SEC v. Jarkesy

Ohio v. EPA (5-4 split, with Barrett joining the dissent)

Loper Bright Enterprises v. Raimondo

Fischer v. United States

City of Grants Pass v. Johnson

Trump v. United States

Corner Post, Inc. v.  Federal Reserve

What is the maximum sustainable public debt ratio?

The “maximum sustainable debt level” is the level beyond which a debt distress event is likely or inevitable.  For Advanced Economies, median estimates range from 80 to 192 percent of GDP, while for Emerging Markets the range is 35 to 77 percent of GDP.   The results for the maximum sustainable public debt ratio based on historical market interest rates indicate a median of 192 percent, while that based on projected interest rates gives a median debt of 183 percent.   https://www.imf.org/external/np/pp/eng/2011/080511.pdf

Comment:  I have done numerous estimates of when the economy would collapse, based on my projections.  I have used 150% of public debt to GDP ratio as the maximum.  The IMF has done their own study about this question, and they think an advanced economy could maintain a public debt ratio of up to 192%.  For example, Japan has exceeded this, (but they have some advantages that other advanced economies don't).  So maybe I should use a higher percent before forecasting imminent danger.

National Debt Crisis Will Destroy The USA (It Just Got Worse)

This is a great video that very clearly explains the problem.  It's only 8 minutes and worth watching.  

The problem is that the deficit over the next 10 years will be larger than the CBO is projecting because most of the tax cuts that expire in 2025 will be extended.  The only way of dealing with this is to print more money, but this will cause inflation, and the newly printed money won't be evenly distributed.  "Inflation creates a larger division between the haves and have-nots. When wealth inequality gets to a tipping point, there will be civil unrest."

It is the British Who Murder Our Presidents

 Read: https://archive.prometheanpac.com/a_police_dossier_it_is_the_british_who_murder_our_presidents

This is an article claiming that British Intelligence assassinated Presidents Abraham Lincoln, William McKinley, and JFK and are now trying to kill Donald Trump.  It sounds crazy but it could be true.  Quote: 

"The first thing to recognize is that the British Empire is and always has been primarily a FINANCIAL EMPIRE, a global system of usury, speculation, and financial dominance by the City of London. The City of London created the global system of private Central Banking in the 19th and early 20th centuries. Today, that private oligarchical system has near dictatorial control over the monetary and financial policies of almost every nation of the planet, as the fate of hundreds of millions of human beings is decided by the controllers of the Bank of England, the European Central Bank, the U.S. Federal Reserve, and similar institutions. The City of London also created, in the 1960s and 70s the “offshore banking system,” imperial financial centers outside the control of sovereign nations, which today bankroll most of the world’s business in narcotics, illicit arms sales and human trafficking."

Lyndon LaRouche died in 2019, but his organization still exists with a name change and is now called PrometheanPac.