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Here we go again!
The History of the Federal Debt.
The US debt is High. Really high. Perhaps higher than it has ever been in the history of the Nation. There are a lot of ways to look at debt. One is the total amount owed. $34,486,439,628 as of 6:58 PM pacific time March 5th, 2024. Another is the total debt per population per person. Which is $102,551. Another way is the debt as a percentage of 123% of the Gross Domestic Product of the United States. The mind-numbing challenge is to beg the question - Is that bad or horrible? Should I panic or we got this? How in the world are we going to pay this back? To gage that, we must look at the assets of the country and its citizens. We must look at the value of the economy, which is measured in small part by the Gross Domestic Product. Which does not count efficiencies created by tech companies like Google and by appliances such as microwaves or preset phone numbers in smartphones. It used to take us a long time to dial a rotary phone on the wall which made fire and sparks to register another phone at another house. Or how long did it used to take to look up a pizza parlor in the yellowpages versus saying “Hey Siri”? That saving of time is not counted by GDP. To evaluate the debt, GDP is the best we are going to get.
Without going into the painful fact that someone, anyone needs to put on their green eyeshade which accountants
used to wear back in the days and stop the madness of waist in the government. We look at the debt as a percentage
of GDP and it is now at 123%. This is about the same as the peak debt hit in 1946. Back then it was around
120%. If history repeats itself, the natural human response seems to be “Oh my God we will never stop borrowing!”
When actually we are at the verge of the largest US growth in the history of the world and this is what happened
after 1946. The madness of borrowing recovered and the debt to GDP fell to about 30%.
The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Private Wealth Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. Comments concerning past performance are not intended to be viewed as an indication of future results.
