“Pay Up!”

Reports Fox News:

Thanks to a combination of high inflation, rising interest rates and unrelenting growth in the national debt, interest payments [on the national debt] are expected to triple from nearly $475 billion in fiscal year 2022 to a stunning $1.4 trillion in 2032.

The nation’s debt presently runs to $32.9 trillion. And as Fox notes, this debt takes on “unrelenting growth.”

As Fox likewise notes, the cost of debt service is up and away. It will likely triple within 10 years.

Within 30 years the Congressional Budget Office estimates debt service will exceed $5.4 trillion.

That is, within 30 years debt service will exceed Social Security… Medicare… Medicaid… and “defense” expenditures.

And the lovely illusion that debt and deficits do not matter will dash against the killing rocks of actuarial reality.

It is a grim calculus.

Large Numbers

But large numbers — such as 32.9 trillion — exert a dulling effect on the sober senses… like large bottles of wine.

They are mere abstractions. They lack all tethering to common experience.

A $1,000 dinner bill, for example, will freeze your blood.

It is extravagant, yes. Yet you can grasp it. You are accustomed to $1,000 expenditures.

But a trillion-dollar dinner bill will stun, gobsmack and stupefy you. It will glaze your eyes.

That is because $1 trillion ranges beyond all fathoming, all imagination.

You would laugh it away… and depart the restaurant instructing the owner precisely what he can do with this bill.

Let us therefore attempt to reduce the airy abstract to solid concrete…

How to Imagine $1 Trillion

The nonprofit Employment Policies Institute places 1 trillion into this perspective:

Let’s say someone told you to wait for something. If you waited 1,000 seconds, it’d only take about 17 minutes. If you waited 1 million seconds, you’d have to wait about 11.5 days… But if you waited 1 trillion seconds, you’d have to wait 31,688 years.

31,688 years!

Let us return to our culinary example. You inform the restaurateur he will have his money in 1 trillion seconds.

He may deem your offer fairly reasonable. It is, after all, expressed in seconds.

Will he deem 31,688 years reasonable?

Let us mix the arrangement some…

Assume for the moment you are gifted command of the printing press. Each bill that comes rolling off is yours to keep.

Yet you can only manufacture $1 bills.

Your energy exceeds even your greed.

You produce — feverishly — one $1 bill each second of each day, 365 days of the 365.

You are very rapidly in clover. Yet you are not content until you collar $1 trillion.

How much time will you require to print 1 trillion $1 bills? Author Bill Bryson:

If you initialed $1 per second, you would make $1,000 every 17 minutes. After 12 days of nonstop effort you would acquire your first $1 million. Thus, it would take you 120 days to accumulate $10 million and 1,200 days — something over three years — to reach $100 million. After 31.7 years you would become a billionaire… But not until after 31,709.8 years would you count your trillionth dollar.

Have you Job’s patience? You will require his entire reservoir — and then another.

How Long Would It Take to Retire the National Debt?

Yet you turn from personal ambition. Your sole concern is the national welfare.

You therefore consecrate yourself to retiring today’s $32.9 national debt.

For ease’s sake we will round the thing to $33 trillion… which it will soon register.

In that case, you multiply the preceding by 33. Here is what you find:

Rinsing away today’s $33 trillion debt would require 1,046,423.4 years of ceaseless labor.

That is… over 1 million years of ceaseless, second-by-second labor.

Assume Almighty God grants you your threescore and 10 — 70 years on Earth.

In 14,948.9 lifetimes, you would complete the business.

Hell, indeed, can wait. Alas… so must heaven.

How do you like it?

The Keynesian “Multiplier” Has Taken up Division

The United States required 205 years to post its first $1 trillion debt.

That debt scaled $32 trillion this January. It will soon scale $33 trillion.

That is, what was previously the work of two centuries… is now the work of months.

Here is progress — of a very peculiar and exotic sort.

Is economic expansion maintaining pace with this galloping debt?

It is not.

Set to one side the rebound year of 2021. Not since 2005 has the gross domestic product exceeded 3% annual growth.

The Congressional Budget Office projects average 1.8% annual growth through 2033.

Debt races, growth creeps.

Thus the Keynesian “multiplier” — the miracle of water into wine — is reduced to a sad, sad caricature.

The multiplier has taken up division.

It remains a multiplier only in the economics departments of ivied institutions and castles very high in the sky.

Debt-to-GDP

Economists Carmen Reinhart and Kenneth Rogoff have demonstrated that annual economic growth slips 2% per year when the debt-to-GDP reaches 60%.

At 90%, growth is “roughly cut in half.”

What is America’s current debt-to-GDP ratio?

Some 124%.

Here the Peterson Institute paints the scene in very dark colors:

Spending and revenues are severely mismatched, and spending is projected to continue to outpace revenues in the absence of intervention from lawmakers. From 2023–2053, annual revenues are projected to average 18% of GDP, while spending is projected to average 26%. That mismatch between revenues and spending will lead to an average deficit of 7.5% of GDP…

The economic outlook for the next three decades anticipates economic growth, but that growth will not be enough to match the growth of the national debt. Over the next 30 years, real GDP is projected to grow by 66%, about a third as much as the period after [World War II].

Pay Up!

These are of course projections.

As we are fond to state, climate is what a fellow can expect. Weather is what he actually gets.

Perhaps we are in for lighter weather than the forecast projects.

Perhaps emerging technologies such as artificial intelligence can vault us into a vastly productive future.

Perhaps the future will be a future of expanding prosperity.

It is a happy possibility we must consider.

Yet we fear the debt burden constitutes too great a strain. We fear the economy cannot push along under the load.

Thus we fear a future of limited growth… slender prospects… and false starts.

In brief, we expect to gutter along.

Of course… the spenders maintain the nation’s debt is not a menace because “we owe it to ourselves.”

Yet one anonymous scalawag is out to collect. “Note to self,” he writes:

“Pay up.”