The Rugged Individualist is ever so grateful that Donald Trump won the presidency. He was our one chance to restore fiscal sanity to government. But while I am “ever so grateful,” I feel ever so sorry for him. The road he faces will make the word “daunting” seem soft and cuddly. Perhaps horrifying, ghastly, petrifying, or paralyzing would be better terms to describe the job ahead.
[Source: What Should Trump Do? By John Mauldin]
[Modified from the Mauldin article] Everyone focuses on the size of the federal budget as if that is the government. I have written many times that the national debt has risen roughly $10 trillion under Obama, in just eight years. The government isn’t very “tansparent” about its debt. Last year the debt rose $1.3 trillion, even though we were told that the budget deficit was only around $600 billion. Lots of off-budget debt gets added every year.
The US federal spending budget is $3.88 trillion as of this year. We focus so intently on on the massive federal budget that we forget about state and local government spending. However, state and local outlays are $3.3 trillion, bringing us close to $7 trillion of total government spending. Very few people realize that state and local spending is almost the same size as total federal spending.
Total US debt, including private and business debt, is $67 trillion, or just under 400% of GDP. We have 95 million people not in the labor force, 15 million of whom are not employed (twice the number “officially” unemployed). We have almost 2 million prison inmates, 43 million living in poverty, 43 million receiving food stamps, 57 million Medicare enrollees, and 73 million Medicaid recipients. And 31 million still remain without health insurance.
This US debt total does not even take into account the over $100 trillion of unfunded liabilities at local, state, and federal levels. These “promises” are written into law.
I keep telling my readers that the people who hold our treasury notes actually think that is THEIR MONEY! They look at their portfolios and see that in the same way they see their checking account. And at some point they will demand payment. All of those workers that were promised retirement benefits actually think that is THEIR MONEY! When planning their retirement date they fully anticipate that those promises will be fulfilled.
Further, since 1910, the US economy is either in a recession or enters a recession within twelve months in every single instance at the end of a two-term presidency… effecting a 100% chance of recession for our new President.
Our President-elect will be laboring to help Americans with this enormous burden already on his back. We need to give him a little space. Bush II and Obama I took 16 years to create this mess. Thus far we are only giving The Donald 4 years to fix it. I wish him the very best and thank him for his willingness to try.