I ran across this a short while ago; on it’s face looks innocuous. I mean we all got it right? Were in debt and it’s going to get worse.
But, when you give it a little thought, why would the Congressional Budget Office (CBO) throw this out there? Why, do tell, is the forecasted future debt depicted as a percentage of Gross Domestic Product (GDP)? And why the strange title: ‘Global Financial Crisis, Pandemic Drove up US Debt.’
While there was some debt that accumulated because of these two events, it’s important to remember that we are talking about dept as a percentage of GDP (not debt alone). When all of those folk fell idle due to the recession following Lehman’s collapse (by the way, the fall out could have been minimized but congress pooh-poohed the solution) GDP took a huge hit and the table was set for last meal of anything resembling rational budgeting.
So, Congress explicitly voted down a $700 M solution to the largest financial crisis the world has seen in 80 years. This chart, produced by the same ‘honest brokers’ in the CBO that advised Congress against saving the nation, introduces ‘the pandemic’ as a cause of the debt problem (actually the debt to GDP problem).
It’s all bullshit designed to deflect.
Here is the same chart with two added lines. The solid yellow starts exactly where the CBO started their line (2000) and ends exactly where CBO ends their line (actually I moved it a little lower so that their blue line would remain visible.
The second line, the yellow dashed line shows what our debt to GDP ratio would be if Lehman had not happened. The bottom line demonstrates something all of us already know: Congress is the cause of all debt problems. How nice of them to have the CBO, an office they control, publish propaganda for our casual consumption.
Here is how hosed we are: Everyone knows that the CBO is using the most optimistic assumptions about what the out-year GDP will be. When they use the most optimistic assumptions and the debt to GDP still rises by at least 50 percent, then the true level of the debt, in absolute dollars (vice a ratio of GDP), must be mind boggling.
OBTW, it’s now safe to begin wondering what the GDP would be without all of the ‘new arrivals’ at our southern welcome centers. Without the demand signals they place (purchases) and the labor they provide our GDP numbers would be so far into the tank that taxes would go through the roof and those untouchable institutions known as Social Security and Medicare would collapse.
When you really think about it, the movie ‘The Matrix’ is pretty much spot on in terms of the value of a human life: it’s to produce fuel (revenue) for ‘the machine’.