Las finanzas públicas se quedan
horribles en muchos sitios. EEUU, que lidera el mundo, las tiene desastrosas.
La FED sigue emitiendo como si no hubiera un mañana, sigue comprando bonos a lo
loco, y eso permite a los emisores, el Gobierno suyo, endeudarse a placer. Esto
tendrá consecuencias…
Yesterday Treasury released budget stats
for the month of May '20, and they were, as expected, godawful. A simple virus,
potentiated by aggressive shutdown mandates, has caused government spending to
explode and revenues to crater. Measured on a rolling 12-month basis, the
federal deficit in the past two months has more than doubled, reaching the
obscene level of $2.126 trillion, and it will be higher still when the June
numbers are tallied. Our national debt now stands at $20.1 trillion (the correct
measure being the portion that's owed to the public). As a percent of GDP, our
national debt is about as high as it was during the height of World War
II—about 110%, and that's as high as it's ever been in recorded history.
The raw numbers are frightening, to be
sure. But we are not doomed yet. The charts tell the story:
Chart
#1
Chart #1 shows the 12-month moving average
of federal spending and revenues. The past two months show a very sharp—but not
unprecedented in size—deterioration in each from their long-term trends.
Chart
#2
Chart
#3
Chart
#4
Chart #4 shows the federal deficit as a
percent of GDP, with the nominal value of the deficit (green) highlighted in
green. I've calculated the value for Q2/20, but my estimate of actual number,
which won't be available for over a month, is only very approximate. I'm
assuming GDP in the second quarter declines at a 40% annualized rate. But it's
highly likely that this quarter's numbers will be the worst in history, as the
chart suggests.
Chart
#5
Chart #5 shows federal debt held by the public (the correct measure excludes debt
owed to the social security system). Looked at using a log scale for the y-axis
over a long period, the growth of debt does not look all that unusual.
Chart
#6
Chart
#7
Chart # shows the true measure of the burden
of our federal debt: interest payments on the debt as a % of GDP. It should
come as a shock to most people: how can the burden of debt be so low when the
actual debt is at record levels relative to GDP? Answer: it's because interest
rates on the debt are at historically low levels. If interest rates remain low
for the next two years, as the Fed recently predicted, and the economy recovers
and federal spending is reined in, it should be easy to avert disaster.
The burden of federal debt is calculated
the same way you would measure a household's debt burden: by dividing annual
debt service payments by annual income. Overall, and as a nation, we are
currently spending about 3% of our annual income on our national debt. In the
great scheme of things, that is a drop in the bucket—rare is the household with
such a low debt burden!
Abrazos,
PD1: Ayer fue el Corpus. Se
celebró la Eucaristía:
