Biden didn’t make this mess by himself.

It’s election time. Both major parties are having a grand time pointing fingers at each other about negative developments, while fighting to take credit for anything that can be perceived as positive.

Let’s look at some disheartening numbers to illustrate just how serious a situation we are facing as a country.  Right now, our national debt is at $34.6 trillion AND CLIMBING.  According to the federal government’s Bureau of Economic Analysis, the USA’s gross domestic product (GDP) stood at $27.96 trillion for the fourth quarter of 2023.   For those who may have missed out on economics class, the GDP is defined as:

SO –  if we took the total market value of everything produced within the borders of the United States to pay off our national debt, we’d still be more than $7 trillion in the hole.

This mess did not just happen the moment Joe Biden was sworn in as president.  The debt has been accumulated by Republican AND Democrat administrations in DC.  It’s been accumulated during periods of Republican AND Democrat control on Capitol Hill.  There’s a lot of lip service paid to fiscal restraint. But not a lot of practicing what gets preached. 

Arguably, the number one responsibility of folks elected to serve on Capitol Hill is to pass a balanced budget.  (I think this actually been done ONCE in the last fifty years or so.)

At least one credible economist is pointing out that we are on the verge of a massive surge in transfer payments —  government payments for which no work was performed:

[…] Four Reasons Transfer Receipts Poised to Surge

  1. Influx of illegal immigrants
  2. Republicans just agreed to expand Child Tax Credits
  3. Medicaid Expansion
  4. Boomer Retirements

Influx of Immigrants

Please note: Denver Health at “Critical Point” as 8,000 Migrants Make 20,000 Emergency Visits

Much of that you will pay for directly with higher premiums. But the Federal government will pick up some of it via Medicaid Expansion.

Child Tax Credits

We have a new number on the deal the House Republicans agreed to. It’s $1.5 trillion over ten years.

For discussion, please see How Much Will That GOP Deal on Child Tax Credits Really Cost?

The reported numbers do not include an Affordable Housing giveaway, or aid to Ukraine and Israel, or expanded defense spending. More money and bigger deficits means more inflation.

The tax credits add directly to transfer payments.

Medicaid Expansion

On March 9, I noted Medicaid Expansion Was Supposed to Pay for Itself, Instead Hospitals Are Closing

10 states did not fall for the Medicaid expansion trap under Obamacare. The rest are suffering. Private payers (you, one way or another) make up the loss.

Boomer Retirements

Due to age demographics, I expect employment in age groups 60 and over to decline by about 12.5 million.

Population stats are from the BLS. Expected Employment Loss is a Mish calculation based on the Employment Population Ratio (the percentage of people working in each age group).

In terms of expanding transfer payments this is the biggest of the four by far.

Boomers health care need and retirements will have a huge impact expanded Social Security payments and Medicare payments.

And there is a shortage of 6 million workers to replace retiring boomers. This is another set of things the Fed has not properly modeled.

As a result of demographics, transfer receipts as a percentage of real personal income will surge. And due to a replacement worker shortage, wages will likely rise and productivity decline. […]

All of this information is quite verifiable and frighteningly real.  It’s all coming whether we like it or not.  And how are we preparing for it?  We keep reelecting the same people — who have spent us into this mess — with 80 to 90 percent of the vote.  (Remind me again — what’s the definition of insanity?)

Instead of hammering out a responsible budget like so many of us do in our households and businesses,  these politicians keep kicking the can down the road a few months at a time with these minibus and omnibus spending plans.  The spending plans have an expiration date.  The usual game for the politicians is to wait until right before the current spending plan is set to expire, and then hit us with a lot of panicky talk about government shutdowns if they aren’t allowed to spend what they feel like they need to spend.

Here are some details on the latest scare $1.2 trillion dollar spending bill / scare tactic we just got hit with:

[…] ‘A massive spending bill drafted in secrecy and dropped on us in the middle of the night is being rushed to the House floor for a vote with less than 36 hours to review,’ the 50-member, ultra-conservative Freedom Caucus wrote on X.

House GOP leadership touted conservative wins like a three percent increase in defense spending, retaining the Hyde amendment and a ban on gas stove restrictions. But rank-and-file conservatives have called out other provisions like the bill’s $200 million for a new FBI headquarters and $300 million that goes toward the Ukrainian Assistance Initiative.They’ve also sounded off about ‘woke‘ earmarks in the bill:

  • $400,000 for Briarpatch Youth Services in Wisconsin, which offers counseling and gender-affirming clothing for queer youth ages 13-18 
  • $870,000 for Emerging Artist Fellowship Program, which supports defunding the police and anti-racist advocacy 
  • $400,000 for the Garden State Equality Education fund, the largest LGBTQ+ advocacy organization in New Jersey
  • $850,000 for LBGTQ senior housing in Massachusetts
  • $320,000 for ‘training’ at the Steamfitters’ Union in Pennsylvania 
  • $1.1 million for ‘climate resilience and equity’ in parks in Boston 
  • $1 million for SAGE, an advocacy center for elderly LGBT people in New York
  • $845,000 for Envision:You in Colorado, an LGBTQ mental heath group  
  • $1.6 million for electric vehicle buses in Cape Cod, Mass.  
  • $740,000 for increasing diversity in state contracting in Maryland […]

For the record, North Carolina currently has 14 House members (7R, 7D) and two members of the US Senate (2R,0D).    In the House, Republicans Greg Murphy and Dan Bishop were the only ones from our state to vote NO.  In the Senate, Ted Budd said NO while Thom Tillis said YES. 

Not enough pols are taking this crippling debt seriously.  They’re not taking seriously the crippling entitlement liabilities we are about to be hit with.  The name of the game is: (1) get positive press about avoiding a “government shutdown,”  (2) keep the campaign checks rolling in, and (3) get yourself reelected and stay employed, even as many of your constituents LOSE their jobs and their houses due to your lack of courage.