Budget Debt
The US Government spends more than it takes in just about every year. Here are the budget deficit numbers by year since 1932. If anyone wants to know why we have a budget problem in this country, all you have to do is look at the running debt clock. We are now at $21T in debt.! But, if big numbers alone don't get your attention, then lets put the $21T in perspective, it represents over 100% of GDP. The nation owed $10.6 trillion on Jan. 20, 2009, when President Obama was sworn in, and he doubled it – more than Bush piled up in two terms. There is bipartisan agreement that we cannot sustain this level of debt. There is also bipartisan agreement that we must correct the outflows exceeding inflows that drives the debt higher every second (see debt clock) . Everyone who manages a checkbook has seen this problem before and knows how to correct it - reduce expenses and increase income. Increasing revenues is critical to the solution, but will not have an immediate impact. Reducing expenses is also critical to the solution and can generate immediate impact. It is the only thing in your control instantly! Sequestration and government shutdown revealed that with immediate impacts in 2012 & 2013. Everything else we here about this subject beyond these two facts is just noise and should be ignored. The political left and right cannot agree on how to correct this problem. The left solution to our problem is to increase taxes on the rich to increase income. Currently the top 20% of income earners pays 80% of the federal tax burden. So do we want them to pay 100%? 110%? 120%? Maybe just write the check every year for the entire cost of government, whatever it is? Clearly this is not a solution. The right wants us to reduce spending and taxes, which was also a poor solution in a recessionary economy, but in a growing economy in 2017 has promise. But, the truth is we must do both (reduce expenses and increase income), we must do it now and it will not be easy. All the political hot air outside these two facts is simply a distraction from the difficult but obvious answer. Trump's tax law in Dec 2017 had an economic stimulation effect. A growing economy will usually increase income (tax revenues for the government) over the 10 years, but not immediately. The Trump tax reform due to money overseas that will be returning home, will have immediate positive revenue impacts. His military defense spending will have a negative national debt impact. To immediately begin to impact our budget deficit and debt problem whiling anticipating increased revenues we also must immediately and dramatically cut spending. That MUST include discretionary spending AND entitlements (Social Security, Medicare & Obamacare) which represent 90% of the problem. The left will say you are hurting education, the homeless, healthcare of all Americans, the elderly and on and on. The right will shout "we are already taxed enough". All This whining MUST be ignored. No one wants to hurt themselves, their families or their neighbors We have no choice but to intelligently make these difficult decisions while minimizing the pain. But there will be pain. And our representatives MUST ACT NOW. It is a dereliction of duty if they do not. The 2 year budget passed Feb 2018 does not do this. It was a purely bi-partisan negotiation (which is good) but gives everything to everyone and makes no tough decisions on spending. Below you can watch the ongoing debate on this critical issue. And hopefully see the solution we need develop. Then, in 2020, the COVID-19 pandemic arrives and budget busting, debt and printing money takes on historic proportions!
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Bidenomics. Narrative or reality?

1/30/24; updated 2/3/24
from The Gray Area:
1/30/24; updated 2/3/24:
Given the expected point/counter point of political narratives on the economy, it is almost impossible to determine what is really happening unless you vary your news sources. You can read both sides views of the economy here at the end of January, 2024 in this article. Then determine how you feel about it. Summary of left / right opinions from The Washington Post, The New York Times,  The Federalist, FoxNews, The Wall Street Journal with comments from The Gray Area (TGA). Here is what the above economic comments looks like combined into major economic categories: Recovery from pandemic compared to rest of the world:
  • Left: The European economy is barely growing. China is struggling to recapture its sizzle. And Japan continues to disappoint. But in the United States, despite lingering consumer angst over inflation, the surprisingly strong economy is outperforming all of its major trading partners. Since 2020, the United States has powered through a once-in-a-century pandemic, the highest inflation in 40 years and fallout from two foreign wars. Now, after posting faster annual growth last year than in 2022, the U.S. economy is quashing fears of a recession while offering lessons for future crisis-fighting. “The U.S. has really come out of this into a place of strength and is moving forward like covid never happened,” said Claudia Sahm, a former Federal Reserve economist who now runs an eponymous consulting firm. “We earned this; it wasn’t just a fluke.” Major European and Asian nations spent significantly less. In Germany, the government devoted 15.3 percent of GDP to battling the pandemic. France spent 9.6 percent and Italy 10.9 percent. Even Britain, which comes closest to American economic views, lagged far behind the United States with 19.3 percent of GDP. Determined to avoid the policy failures that led to the anemic recovery after the 2008 financial crisis, Biden may have overcompensated. The final burst of coronavirus relief, the $1.9 trillion American Rescue Plan in early 2021, while boosting growth, is widely regarded as having contributed to the surge in prices that lifted inflation to a 40-year high of 9.1 percent. Some economists see more than government policy behind the U.S. recovery. As the pandemic made millions of Americans jobless almost overnight in the spring of 2020, many responded by launching business ventures. “I think we’re seeing something about the American spirit and the kind of economic dynamism that — for whatever reason — doesn’t exist in other high-income countries to the extent that it exists here,” ...and over the last few years, is the big boom in entrepreneurship.”One lesson from the pandemic recovery is the power of the government’s ability to tax and spend, economists said. Congressional actions can affect the economy faster than the lagged impact of a change in borrowing costs...
  • Right: The US has trended consistently about Europe since the 2008 Financial Recession. Showing that trend just over the past 3 years is misleading. Repercussions from the Russia invasion of Ukraine created a “brutal” energy price shock. The wholesale European gas price surged to a record high, much higher than the US equivalent. The US has a booming tech sector which has led the recovery for the US. There would have been GDP growth had we put The Three Stooges in charge.
  • TGA: A recovery with historic inflation, destruction of supply chains, closing down of the energy sector, creating debt through spending on climate change, government and foreign wars, I would not call lessons for future crisis-fighting, except as things not to do. The Washington Post said that the origins of this doom-defying performance can be traced to lawmakers’ swift response to the coronavirus pandemic in March 2020. That was President Trump's administration. Ooops! WaPo is misleading in their narrative here by using that timeframe in the same context as praising the Biden administration, hoping you won't realize it was Trump, who they routinely blame for handling the pandemic so badly (another false political narrative). WaPo also said, buried in the article: The final burst of coronavirus relief, the $1.9 trillion American Rescue Plan in early 2021, while boosting growth, is widely regarded as having contributed to the surge in prices that lifted inflation to a 40-year high of 9.1 percent.
Inflation:
  • Left: President Biden hailed fresh government data showing that annual inflation over the second half of 2023 fell back to the Federal Reserve’s 2 percent target. Inflation has fallen. Why are groceries still so expensive?
  • Right: Inflation is around 3%, and the Fed wants 2%. Your Money Is Worth Less and Less. Under Biden, cumulative annual average inflation is nearly 20 percent. For every dollar you had in 2020, you now have only about 80 cents.
  • TGA: Powell said today that 'Core inflation is still well above target on 12 month basis.  We are encouraged by the progress ... but not declaring victory'. Prices ticked up in December, a reminder of the pressures still facing consumers after a year when inflation fell by nearly half and paychecks grew, delivering real wage gains in 2023 for the first time in three years. Inflation’s cool down from historic highs keeps the Federal Reserve on track to hold rates steady later this month and contemplate cutting them later this year. But Americans aren’t in the clear yet. The consumer-price index increased 3.4% from a year earlier in December, the Labor Department said Thursday. The acceleration from November’s 3.1% advance shows inflation isn’t fully beaten.
Interest rates:
  • Left: On the whole, though, homeownership has become far less accessible during the Biden administration. Mortgage rates have more than doubled in the past two years — from about 3.1 percent to about 7 percent — making it that much pricier to purchase a home and putting a chill on the market. Demand for homes continues to outpace supply.
  • Right:  According to WalletHub, the average credit card interest rate when Biden took office was about 14.7 percent. By November 2023, that rate rose to 21.47 percent. When Biden took office, the average interest rate for an auto loan was 4.56 percent, and the average home loan was just over 3 percent. By the end of August 2023, the auto rate rose to 7.4 percent, and the home loan rate had more than doubled. If you could afford a $500,000 house under Trump, you can only afford a $325,000 house under Biden.
  • TGA: The left tries to remind us that the president has very little power over interest rates.This is true, to a point.  If a president produces policy that generates 40 year highs in inflation, he has a direct impact on interest rates which must be manipulated by the Federal Reserve to bring inflation back in line.  And even then, the new inflated prices, don't usually come back down. That belongs to Biden and his 2021-2023 spending spree.
Growth:
  • Left: President Biden hailed Thursday’s (2/1/24) news that the economy grew by 3.1 percent over the past 12 months, the Commerce Department report showed that the United States appears to have achieved an economic soft landing.
  • Right: The Economy Is Not Growing. The success characterizations Biden and his allies point to are misleading. Biden faces problems with his economic “growth” argument. During Covid, Democrats (primarily) closed down large portions of the economy. Of course, GDP was going to grow once the economy reopened. Again, there would have been GDP growth had we put The Three Stooges in charge. By going from substantially closed to completely open, the economy should have grown robustly. In fact, average GDP growth during Biden’s term will be less than the historical U.S. average since 1950. Moreover, much of this “growth” has been sustained by the depletion of savings and retirement assets, increased consumer borrowing and outlandish government deficit spending.
  • TGA: In addition to outlandish government deficit spending, two foreign wars and an exploding tech sector have contributed to the supposed growth and the false impression of economic flourishing. Both a recession and a soft landing are still possible. Some economists say there is a slowdown coming in the next 6 months. The US is still the safest place to put your money, but there is a correction coming in the market. Growth is needed to help correct the debt to GDP ratio, and we are not getting that growth. A debt crisis looms.
Job creation:
  • Left: Employers added 216,000 jobs, with unemployment steady at 3.7 percent. President Biden touted the better-than-expected numbers in December’s jobs report. “Strong job creation continued even as inflation fell,” he said. The Biden administration has pointed to job growth since January 2021 as one of its major policy achievements: More than 14 million jobs have been created since Mr. Biden took office.  You might be seeing two different numbers for 2023  job growth today: 2.9 million vs 2.7 million. The smaller figure is based on data that has been adjusted for seasonal patterns — which is important when comparing one month to the next, but less so when looking at a full year. The unemployment rate held steady at 3.7 percent in December, making December the 23rd month in a row that it has been under 4 percent. The labor force shrank by nearly 700,000 workers in December.  In January, the labor market added 353,000 jobs, far more than expected, in a sign that economic growth remains vigorous.
  • Right: Biden’s “job creation” claims likewise are deceptive. 'That job growth is largely due to the economic recovery from the pandemic, during which a healthy economy was suppressed by the shutdown.' 
  • TGA:  In addition to false Biden accolades for job growth, part-time workers are playing a roll in the unemployment numbers (U6) and average weekly hours fell to the lowest since 2010. Some economists say this signals a tighter labor market.   Some Tech layoffs are already beginning (see Amazon, BlackRock, Nike, Intel, UPS, Google, Microsoft and Citigroup), why?  I hope they are wrong.
Debt:
  • Left: The federal deficit peaked under Trump, though both he and Biden have added trillions to the national debt. Since then, the deficit narrowed in the first two years of Biden’s presidency. But this year it grew again, by 23 percent, leaving the country with a $1.7 trillion shortfall.
  • Right: Americans Are Deep In Debt and Poverty as summarized below in 'consumer confidence'.
  • TGA: The deficit is different than the debt. The deficit is the gap between what the government brings in and what it spends. We already know we are spending way too much money. According to this chart, excluding the COVID years, 2020 & 2021, Biden's deficit is grossly higher than Trump's, which was not good, and higher again in 2023.

Fitch Ratings on Tuesday downgraded America’s long-term foreign-currency-issuer default rating, citing ongoing and projected future fiscal instability, saying the U.S. is less reliable to honor its obligations.  We need to get the debt to GDP under control. The only way to do that is through a combination of economic growth and reduced spending.

U.S. national debt stands at over $33.99 trillion as of January 2024. Debt is the running total of what the government owes to its creditors. According to the Congressional Budget Office, net interest payments on the federal debt were $475 billion in 2022, and are projected to rise to $640 billion in 2023. Trump's contributions to the national debt can be seen in this chart.

His 2017 tax spending increased federal revenues and generated economic growth. 2020 COVID spending is credited with contributing to the US strong performance against COVID. Biden's post COVID spending caused inflation problem.

The national debt has grown by over $6.24 trillion since Biden took office in 2021.  Another decision, to not make a decision, occurred in Congress in June 2023 that suspended the debt ceiling, allowing further spending until 2025. This irresponsible legislative inactivity needs to stop.

Wages: Consumer Confidence:
  • Left: Biden’s Economy Is Great Everywhere Except in the Polls. Despite lingering consumer angst over inflation, the surprisingly strong economy is outperforming all of its major trading partners. Gas prices could help explain some of the gloom Americans are feeling now. Gas prices more than doubled between April 2020 and April 2022, from $1.84 a gallon to $4.11. They peaked at an all-time high of nearly $5 a gallon in June 2022 but have come down since. Analysts say gas prices could fall below $3 per gallon in the coming weeks, thanks to a combination of increased production and slowing demand. In January, jobs report was up, recession fears have eased, growth and job gains are beating expectations, inflation is cooling, and consumers are happier. The president is waiting to benefit.
  • Right: Now that the 2024 election approaches, Biden and his allies are panicky. They say you are wrong and economic times are great. You should stop complaining and thank them for what they’ve done for (to) you. Between 2021 and 2022 (after the pandemic ended), median household income dropped under Biden by 2.3 percent, and median household income after taxes dropped by 8.8 percent. You have less money. Not only are your dollars worth less, but you also have less of them. Before Covid, personal savings in the U.S. reached $1.447 trillion. By year-end 2022, that figure dropped to $686 billion. You say, of course, savings were depleted; the economy was closed during Covid. In actuality, savings in the U.S. increased to $2.99 trillion during Covid. That’s what makes the depletion of savings under Biden so staggering — savings dropped from $2.99 trillion to $686 billion during Biden’s so-called “recovery.”Americans Are Deep In Debt and Poverty. Under “Bidenomics,” credit card debt has soared. Not only do you have more debt, but you pay higher interest rates on that debt.
  • TGA: WaPo says: The final burst of coronavirus relief, the $1.9 trillion American Rescue Plan in early 2021, while boosting growth, is widely regarded as having contributed to the surge in prices that lifted inflation to a 40-year high of 9.1 percent. Which is to start an historic inflation, destroy supply chains, close down the energy sector, creating debt through spending money in climate change, government and foreign wars and call that a growing economy. But voters are not convinced that Biden’s economic agenda has been effective – meaning that in order to run on a message of economic achievement, Biden will first have to convince voters that he has made economic achievements. In polls, the majority of Americans still say they trust former president Donald Trump’s handling of the economy over Biden’s. Only 35% of voters in seven swing states trust Biden on the economy
Political narratives on  display: LEFT:
  1. misleading
    • titles of spending programs, like 'the American Rescue Plan', were misleading and had a negative vs positive impact on Covid recovery.  'The Inflation Recovery Act' funded climate change and did nothing to fight inflation. These and other legislation titles are designed to sound good and give politicians something to point at in order to say they did something targeted and positive, when in fact, they were something else entirely.
    • gas prices have come down, though not to the levels before Biden
    • congratulating the 'swift response' for helping the US overcome Covid, is a misleading narrative. By using that timeframe (2020) in the same context as praising the Biden administration, they are hoping you won't realize it was accomplished by Trump, who they routinely blame for handling the pandemic so badly (another false political narrative).
    • Wages after inflation, grew. Wages adjusted for inflation, declined. Is that good or bad?
  2. false
    • Incomplete inflation review. Actually 'your Money Is Worth Less, cumulative annual average inflation is nearly 20 percent and you now have only about 80 cents of what you have in 2019.
    • Taking credit for a return to normalcy and something Biden did is just false.  He only hurt the economy.  The Fed tight money program, though late starting, is what is holding our economy together for 3 years. And the people know it.  We  hope it will continue to be successful.  But even then, we are left with the destructive financial actions of teh  Biden Administration (+20% cumulative inflation).
    • the false impression of economic flourishing.
    • the labor market is not strong and is suggesting a tight labor market coming, with some layoffs already beginning (see Amazon, BlackRock, Nike, Intel, UPS, Google, Microsoft and Citigroup)
  3. taking credit for nothing
    • job gains are from bounce back after COVID
  4. ignoring negatives
    • excessive spending caused inflation; especially 'the $1.9 trillion American Rescue Plan in early 2021', followed by other unnecessary discretionary spending like The Inflation Recovery Act'. 'Congressional actions can affect the economy faster'. (WaPo actually made brief reference to this at teh bottom of their article.)
    • inflated prices are up 20% and will stay at that level forever
    • COVID lockdowns of healthy, minimal risk people, hurt the economy (and people) tremendously
    • COVID policies broke supply chain
    • the 'swift response' to COVID, was Trump's
    • had we left the energy sector alone we would have had an even greater economic recovery, given the energy shock caused by the Russia invasion of Ukraine.
    • credit card interest rates have gone from 14% - 21%. Car loans from 4% to over 7%.
    • average GDP growth during Biden’s term will be less than the historical U.S. average since 1950.
    • child-care costs have been rising at nearly twice the rate of inflation.
  5. 'home ownership has become less accessible'
    • Mortgage rates at about 6%.
    • Housing prices skyrocketed.
  6. The debt!
    • $33T in federal debt is unsustainable (every President since GW Bush -2001- has contributed to that, but Biden unnecessarily contributed $6.7T in 3 yrs.)
    • debt to GDP ratio is unsustainable
  7. Authoritarian tendencies
RIGHT:
  1. ignoring positives
    • COVID recovery compared to rest of world is good.
    • Fed policies seem to be working
    • entrepreneurship has surged
Trying to take credit for fixing a problem, inflation, that you created with over spending, jobs that would have bounced back on their own when you reopened the country and let people go back to work after COVID, is not an honest narrative. And, blaming the victim (us), for not realizing how good things are, is not a sound economic strategy. It is good political spin hoping no one will remember how this all began. We are still looking at an uncertain future, and telling everyone things are wonderful. It is political narratives at work to create a perception, but just not economic reality. More From The Federalist: More From The Washington Post (subscription required): Falling inflation, rising growth give U.S. the world’s best recovery


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