Submitted by Mark McHugh from Across The Street
Elmo Tries to Explain The National Debt (Again)
Muppets have received a lot of bad press since Greg Smith realized that he is not, in fact, a one-percenter. Fortunately Elmo’s back to reclaim his rightful place in the financial world: Making the seemingly incomprehensible comprehensible while politely pointing out what should be obvious to everyone not in diapers. That’s not so easy when the economic views espoused by everyone from central bankers to TV talking heads can only be accurately described as infantile.
It’s hard to get the right answer when you’re counting the wrong stuff, and maybe that’s why Wall Street’s minions never discuss income per capita. It’s a meaningful measure of economic strength that ordinary Americans can relate to. Well, that and it exposes “pro-growth” policies for what they actually are: An excuse to loot the country in broad daylight by focusing on GDP, where government money, no matter how horribly misspent, shows up in the “win” column. Strip away that illusion and it becomes crystal clear that their path to prosperity is our highway to hell.
In case you haven’t noticed, incomes (not GDP) pay mortgages and support small businesses. Increasing the National Debt by a can you say “parabolic?” 54% in the last 42 months hasn’t budged income per capita in nominal terms. If you adjusted for inflation, you’d find that Americans are actually about 12% poorer today than they were in 2006. We’re not “growing” our way out of this, we’re just going deeper and deeper into hock, courtesy of a government with about as much fiscal discipline as crack-whores with a stolen credit card. Here’s the thing: It’s your credit card, so maybe you should understand how much they’re spending:
Just to be clear, we’re talking about $400 per citizen per month in new charges alone, month after month after month. Here’s what me and Elmo can’t figure out: Why would attempting to break this spiral be labeled Class Warfare? Of course you don’t have to believe us, there’s far more distinguished schools of thought out there:
- From 1947 to 1974 US income per capita grew more than National debt per capita 25 times.
- In the last 30 years, National debt per capita has grown more than income per capita 24 times.
- The last time income per capita grew more than national debt per capita was 2001.
- Ben Bernanke arrived at the Federal Reserve in 2002.
I’m going to ask Elmo to leave before this gets ugly…