To Hell In A Bucket

“No one really cares about the U.S. federal debt,” remarked a colleague and Economic Prism reader earlier in the week.  “You keep writing about it as if anyone gives a lick.”

We could tell he was just warming up.  So, we settled back into our chair and made ourselves comfortable.

“The voters certainly don’t care about the federal debt,” he continued.  “They keep electing the same spendthrifts to office.

“And the politicians know the voters don’t care.  They also know that making more and more promises is the formula for getting reelected.

“Deep down, the aging masses know they need massive amounts of government debt to pay their social security, medicare, and disability checks.  On top of that, many of the so-called gainfully employed are really on corporate welfare; they hang their hats on government contracts to fund their paychecks.

“You know as well I do how this crazy debt based fiat money system works.  The debt must perpetually increase or the whole financial system breaks down.  The best we can hope for is that the ongoing currency debasement merely leads to a subtle erosion of living standards.  That’s the best-case scenario.

“But, again, no one except maybe a handful of your readers’ gives a rip about the federal debt.  Plus, if you’re gonna keep writing about it you need to use better terminology.

“The federal debt has grown at such a rapid rate that standard dollar units no longer capture what’s going on.  The debt numbers are so large it is difficult to distinguish between hundreds of billions and tens of trillions of dollars.

Going Broke at Mach 30

“For better perspective, you need to describe the debt growth in astronomical terms.  You see, astronomers use light years to adjust for large distances.  A light year, as its name suggests, is the distance light travels in one year.  One light year converts to light traveling about 5.87 trillion miles per year, excluding leap year of course.

You noted that since President Obama took office in early 2009, at about the time the American Recovery and Reinvestment Act was passed, the U.S. federal debt has increased from $10.6 trillion to nearly $20 trillion.  Well, you were wrong.

“In the several days since you wrote that article, did you see the federal debt jumped to over $20.1 trillion?

“Apparently, after Congress suspended the debt limit last Friday, the Treasury went ahead and reported the $300 billion of off balance spending they’d run up over the last six months since hitting the debt ceiling in March.  This is what Treasury Secretary Mnuchin meant by resorting to ‘extraordinary measures’ to keep the government humming.  Sounds like Enron accounting to us.

“Anywho, over the last 104 months the federal debt has increased by $9.5 trillion – or at an annual rate of about $1.1 trillion.  This equals a rate of increase that’s nearly 20 percent the speed of light.  This also pencil’s out to $34,880 of new debt per second.  Are you starting to grasp the enormity?

“Still, if the speed of light example doesn’t do it for you, how about the speed of sound?  When Chuck Yeager first outran sound he reached what was called Mach 1.  That equals 767 miles per hour – or 1,125 feet per second.

“So, at $34,880 of new debt per second, the federal government is running up the debt at a speed that’s over Mach 30.  Yes, things have really gotten out of control!

To Hell In A Bucket

“You’d think that running up a tab at a rate like that would be a lot of fun.  But look around.  No one, including the upper crust, is having fun.

“Take that Facebook geek, for example.  Zuckerberg!  Have you seen the mug on that kid?  He wouldn’t know what fun is, if it jumped up and bit him on the behind.

“How much longer this government debt binge can go on for is anyone’s guess.  One thing is clear, however.  It has gone on much longer than any honest person could possibly fathom.

“Under George Dubya the federal debt doubled from $5 trillion to $10 trillion.  Then under Barry Big Ears the federal debt doubled again to $20 trillion.

“There are predictions floating around that The Donald will again double the federal debt, taking us to $40 trillion.  If he and Chuckles Schumer succeed in obliterating the debt ceiling, he just may pull it off.

“Can you imagine how miserable the economy will be when it’s larded up with $40 trillion in government debt?  You’d be lucky if GDP merely flat lined.  The whole dang shebang will be crushed under weight of this massive debt.  And don’t get me started on corporate and private debt – that’s a whole other story.

“You see where this is all going, don’t you?  To hell in a bucket!

“You’d think runaway government debt would be a big deal for people.  But it’s not.  As I keep telling you, no one cares about the federal debt.

“If you want people to read your articles, you need to write about Amazon or Apple stock – or cryptocurrencies.  Tell them prices will double and then double again.  That’s what people want to hear.  So why not give it to them?”


MN Gordon
for Economic Prism

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15 Responses to To Hell In A Bucket

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  6. Tim Ayles says:

    I know this is hard to imagine, but the conjecture that “this will end badly” that always follows these types of rants, might actually be wrong? Did the writer know that the national debt, to the penny, equals private sector savings? When the country is in $40 trillion in debt, GDP will be at $40 trillion. It’s basic math.

    Another scare tactic that is often trumpeted forth by the “this will end badly” crowd is the half-truth comment that “The U.S. dollar has lost 96% of its purchasing power over the last XYZ years.” On the surface, this seems like a logical statement. Everyone knows that you could buy a candy bar 30 years ago for 5 cents, while that same candy bar today costs $1.00.

    Left here, this argument seems convincing and causes the uninformed angst that can lead to anger and a desire to buy a bunker stocked with ammo. It is best though to live in a world of full truth, which brings balance and perspective one may not have had.

    I like to ask a simple question to prove my point when addressing this half-truth. It goes like this:

    “If you had to work for 10 minutes today to earn 1 gallon of gasoline that costs $4 per gallon, are you richer or poorer today compared with having to work for 20 minutes to earn a gallon of gas X years ago when gas cost $2 per gallon?”

    You see, most who make this argument of a devalued dollar forget to mention that we are making many more dollars per hour to do the same job. Sixty minutes of labor in 2017 is the equivalent of 60 minutes of labor back in 1980. That is the constant. While the price of that candy bar has skyrocketed, the amount of dollars we get for 60 minutes of labor has also skyrocketed.

    Just to prove my point, let’s take a look at an ounce of Gold the last time it went through a parabolic spike in 1980. The average price of gold in 1980 was $615/oz. Back in 1980, the minimum wage was listed as $3.10 per hour. This means it would require the minimum wage laborer to exchange 198 hours of labor (before taxes) to earn that ounce of gold. Today, with gold sitting at $1348/oz. and the minimum wage at $10.50 here in California, the minimum wage worker need only exchange 128.38 hours of labor to earn that same ounce of gold. So while the price of gold is in fact up 119% during this time frame, the amount of dollars earned per hour for the minimum wage laborer has gone up FASTER than the price of gold. I realize I am cherry picking data points here, but the thrust of the point should not be missed….. just throwing out the price of goods and services without the corresponding recognition of the wage increases is ignorant at best, and deceptive at worst. Now, this doesn’t mean wages always keep up with inflation, but this little exercise is proof that an ounce of gold is cheaper today than it was when gold was less than half the price….. and the value of the dollar was much stronger!

    Oscar Wilde from Lady Windermere’s Fan states it best:

    “What is a cynic? A man who knows the price of everything and the value of nothing….”

    • Joe Saindon says:

      Your point about making more money for less work is hogwash. Wages for the majority have not kept pace with inflation so discretionary spending is way down.

      Your point about gold ignores the fact that it should be much higher but it is being manipulated.

      Good try though

      • Tim Ayles says:

        How is it hogwash? It’s the literal numbers. Just because you say wages haven’t kept up since 1980, doesn’t make it a fact. I did state it isn’t a constant, as wages were increasing faster earlier in the data set, but the bottom line is, you have only passion to try to prove your point. I have data. Who is the peddler of hogwash?

        In regards to gold, ok, not going down the gold suppression route. The same can be said about gas though. Is gas also being illegally suppressed?

        I love your passion to what you think is so true, yet sheeple like me just don’t see what you so clearly do. But, when you lay your head on the pillow and think about what I said, maybe, just maybe, you might realize it is you who are misguided, having been led to being irrationally scared by so many for so long. I was there too. It is freeing to actually understand why it hasn’t all collapsed as it is supposed to.

        • Fred says:

          I agree with Joe on this one. Anyone who follow the stock market knows it is highly corrupted and manipulated now a day. So comparing wages to gold price is a joke. Wages has not skyrocketed for the middle class but only for the upper 10%. Several decades ago, one man can afford to support a family, buy a house, a car, vacation, healthcare, education, etc. Not so today. Many 25 years and older are still living at home because they can’t afford to move out on their own. Gov employment data, jobs report, inflation, etc. are all lies.

    • Bob M. says:

      Your commentary is so wrong on so many levels it’s hard to figure out where to start. So I’ll leave you with one thought:

      Inflation (printing money) and government spending have the following end results:

      1) the reduction of savings in favor of consumption, and the erosion of wealth in said savings.
      2) the diversion of capital to the government, where consumption is king, away from the private sector where investment produces an ROI, jobs, and profits for reinvestment.
      3) the relative impoverishment of the populace.

      Let me suggest you read some Hazlitt and Rothbard, and generally get a clue about where this is all headed. Want to see the future? Just look at Japan.

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  8. I have been concerned about our country’s debt for many many years. Please don’t include me in your comment about nobody cares.

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  11. Buddy says:

    Petrodollar appear to be finished deflation and inflation seems to be occurring at the same time . Example gas down and everyday living up 7/10 percent per year.
    High rents moderating to a lower level but middle income rents still going up.
    Money supply turnover has not reflected into official inflation over 2 percent.
    They will be glad to say it can’t get over 5 but in the real world it might start to be hyperinflationary. Confidence in the financial system degrading along with faith I government . Not necessarily because of what does or tries todo .
    The ongoing illegal coup against a duly elected president which is occurring from media
    and both democrats and Republicans and the intellegience agencies and military is
    a deep state plan which the people must recognize is being done so things can keep rolling along.
    It is reported in the real alternative media that about one third of the government will betaken down because of pedephila and other crimes including bribes and treason.
    If you want real info on what true inflation is checkout Shadowstats .com
    Wake up before it allsinksintoa cesspool!!!!

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