Biden Presidency Conjures Up Fiscal Nightmare

Joe Biden

No matter what party you support, no matter how ignorant you choose to be about exploding our national debt, the consequences of this bites everyone just as hard.

As if 2020, the biggest fiscal devastation we have ever dealt with in a single year in history, wasn’t bad enough, get ready for more in 2021. For those of us who preach fiscal responsibility, which means at least trying to slow down the path to fiscal destruction that we are on, the worst has happened, and the nightmare we have had is about to get a whole lot more real.

The prodigal grandfather has come home, not with his hat in hand, begging forgiveness, as in the original prodigal son parable told by Jesus, but to lead the new family empire, where Dad, Congress in this case, has joined him in the prodigality. The other son isn’t just disappointed that his prodigal brother is getting more attention now, he’s now been locked in the basement as the rest of the family has come to embrace the ways of the wayward son.

2020, the state of the kingdom before our prodigal grandpa took the throne, was where the fiscal insanity began, and there’s no other way to describe what we just saw over the past year. While more and more people are coming to realize that our looking to choke our economy was a terrible idea, although even the WHO had known that for years prior to 2020, they just conveniently changed their mind.

We told you this from the very moment that the idea of these lockdowns and other physical restrictions were even contemplated, and we weren’t just speculating here, as both the mechanisms involved and the evidence of past attempts all make it very clear that this is a bad idea in itself, apart from the economic damage it has done.

There are still many that stubbornly cling to the idea that physical restrictions somehow helps stop the spread of this virus. They see this decision as choosing between the benefits of slowing it down versus paying the economic price, assume that any price will be worth it, and ignore the fact that such a thing spreads the virus even more.

It’s not hard to figure how this happens, if you are willing to devote a little thought to the matter. Airborne viruses travel in the air of course, and you can’t physically distance from the air. Close contact with infected individuals does increase the spread rate, but what physical distancing and lockdowns do is have people huddle together even more closely, the opposite of the intended effects.

This is the reason why you see seasonal outbreaks happen during the colder weather, when people go out less. It’s not that they don’t go out at all, and if we were somehow able to quarantine people completely, this would work in principle, as if you came in contact with no one you would at least reduce your potential exposure, but that’s not possible in practice or anything close to it.

Humans are social creatures and when you restrict their going out in public, this just serves to have them huddle together more in private. We already have this going on naturally without any additional restraint, where the cold weather alone will produce this by increasing the time we spend inside, and dramatically so in fact, and the more time we spend inside, the higher the spread rate of infectious disease becomes.

This isn’t all bad because hastening the spread rate is actually a good thing, and slowing it down would actually be bad because it would serve to prolong the pandemic and cause the overall deaths when it is all said and done to be higher. We have all the data we will ever need to show this, and this is why leading epidemiologists have been telling us we will kill more people with this strategy, but they miss one important thing here, the fact that this increases rather than decreases spread.

The reason why this is so bad is that public officials ignore the obvious fact that lockdowns increase rather than decrease spread, and double down as their efforts end up escalating the pandemic. They lock down, they see things get more out of control as we should expect to see, and see every time in fact, and then lock down tighter in response, making things even worse.

There will be a time, and not that far off, when we do achieve enough herd immunity to see the pandemic wane and disappear, and this happens with every epidemic or pandemic. Some take longer than others to resolve, and genuine worldwide pandemics like Covid or the Spanish Flu do take some real time, between one and two years in fact, as it takes time for viruses to spread enough to get to the point where the majority of people are immune, either by prior infections or pre-existing immunity from similar infections. There is no other way out of these things, as we can’t make this better but we sure can make things a lot worse than they need to be, especially with the massive amount of economic harm that we can cause in these efforts in vain.

Plenty of people are hoping that vaccines will stop the spread, perhaps seeing someone say this on the news and just believe what they hear, but this vaccine or any vaccine does not stop transmission, and this has been completely verified in the trials although no one with any real scientific knowledge expected such a thing. At best, it’s only after you get infected that any benefits of vaccination kick in, and you have to be infected first.

Ironically, the evidence we have for these vaccines shows that they will increase not decrease the spread, as the only thing this might do is suppress symptoms such that you are infected but less likely to be aware of it, and instead of isolating, you unwittingly spread the infection you have even more than otherwise. Once again, that’s not a bad thing in itself, as we should want this, but when combined with a redoubling of our economic strangulation in the face of rising case levels, this stick does have a pointy end on it, a very pointy one.

Not one of our attempts at seeking to control Covid spread has succeeded at all, and in fact all of them have served to increase not decrease its spread. None of these things either make sense or have any experimental data to support it, and we should not need to wonder why all these measures have utterly failed to slow down the spread and instead have increased it proportionately, even though officials still stubbornly persist to a large degree with them.

This does not even count in all the collateral damage involved, anywhere from people losing their jobs, not seeking medical care when needed due to being afraid of the virus, increased deaths due to all the stress that the economic side of this is causing, to our elderly dying of broken hearts alone while their family cries in the parking lot and are not even allowed to see them to say goodbye one last time.

The Economic Damage This Caused Is Far Greater Than People Realize

We’re out to speak about the economic damage of this in this article, where we have worsened things from a health perspective and now need to look much more seriously at the economic and especially the fiscal damage of our economic self-mutilation that we have been so willing to incite and endure.

Specifically, we are concerned about the fiscal side of this, the real economic cost over time. Of the two, the short-term economic cost does extract its cost in human misery, but this part of it will be all over once the pandemic ends and we get back to normal, but the bill for it remains.

Only our most elderly population suffered through the pain of WWII, which took the lives of over 70 million people, but after the war ended life returned to normal pretty much. The U.S. Treasury borrowed an extra $220 billion dollars though, taking the national debt from $49 billion to $269 billion in just a few short years, and this is not only all still on the books, we’ve been paying interest on this ever since and will continue to do so in the future, forevermore or until our government defaults on our debt and collapses.

For every billion dollars on our national debt, taxpayers owe $8 each, based upon the current number of taxpayers in the country. None of this war debt has ever been paid back and all $220 billion is still on there plus all the interest it has accumulated over the last 75 years, in addition to all of the other overborrowing that we’ve done since.

When calculating our current obligation per taxpayer, we all still owe $1,760 from the debt we piled up in WWII, which may not seem like that much but when we calculate in interest, this bill has now grown to over $25,000 per taxpayer. This brings home the idea that the overspending of today will be borne by future generations, as well as the impact over time that this borrowing causes, what we are subjecting future Americans to.

It is not that we or even future generations will ever be paying back this WWII debt or any debt, but like any debt we have, we do have to pay interest on it, throughout our lifetimes in fact. If we think this is just a theoretical debt, the fact that we give up about half our income to governments each year as our bill for all this should cause us to see this as not just some theoretical number that doesn’t matter but one with real teeth that bites.

When we look at the cost of our 2020 overindulgences, all those extra trillions, this just in itself has added an additional $42,000 to what each and every taxpayer now owes, bringing the total now up to $222,000 per taxpayer at the end of the year. We are all invested in this, as the government has borrowed this much on our behalf to try to compensate for the forced strangulation that they ordered, and no, this is not manna from heaven that they have used.

The final numbers are in, and on the purported benefits side, we have managed to accelerate the spread of this virus, without question, and without even exception, and the bill for this is $42,000, or $84,000 per two working person family. That sure is a lot of money to waste.

The bill would have been considerably higher if not for the Republicans being able to exercise their power to demand more restraint, the opposing of the $3 trillion Heroes Act for instance and later settling for a paltry trillion. Biden and his prodigal party have now taken over and the idea of restraint has been banished from the kingdom now, which is of extreme concern and will do irreparable damage.

We already worried enough about the existential threat to our country of the exploding debt that we saw over the last decade, and the idea of this being escalated by Democrats who are far more irresponsible fiscally is simply hideous. They are not looking to build back better, they are instead bent on a path of destruction whose consequences can never be undone, like the overspending of WWII still sits on our balance sheet, but of a proportion far greater and far more dangerous.

Biden has anted up in this new poker game with our money with a plan to spend another $1.9 trillion on another Covid bill, to go along with all the other trillions of our money that he and his party is getting ready to spend on a number of hard line socialist programs. People see numbers like this and get excited about more help on the way but do not realize that this bill alone adds $15,200 per person to our debt, and as always, additional debt that we will be paying interest on for the rest of our life, for the rest of our children and grandchildren’s life, and beyond.

The real betting remains on the horizon, as this higher Covid relief is a small part of all the extra spending that this party plans on making. The defense of this always came down to the Democrats not having complete control, and now that they do, now that the worst has happened, now we need to really be saying our prayers.

Barrack Obama, who Biden was the sidekick of for 8 years, wasn’t known as all that prodigious, and this was at a time where his party was far more centrist than these radical socialists that Biden is in cahoots with today. The bill for Obama was a cool $10 trillion, the amount that was added to our debt during his reign, and he didn’t even have full reign like Biden currently enjoys for at least the next two years.

The bill for Obama is nothing to sneeze at though, $80,000 per taxpayer, at a time where our national debt became doubled in just 8 years. In over 200 years, the United States racked up $10 trillion in debt, and with Obama at the helm, matched that in the next 8. What is on the agenda now is even more disturbing than this as we move much closer toward the economic doom that this will one day cause.

People were disturbed when we got to the point where deficits exceed a trillion dollars a year, or another $8,000 a year in additional debt per taxpayer, but at this rate we could probably string this along for quite a while before we get to the point where we exhaust all the cheap money at today’s low rates and people start demanding more to lend to our government.

We do not even need to get to this point, which is becoming closer and closer on the horizon as we continue to accelerate spending, as all this extra spending in itself puts upward pressure on rates over time, as it is clearly inflationary. Add in the unique situation of this boot on the neck of the economy which will be removed, when the inflationary pressure of this massive extra spending comes to roost, that will really serve to speed up the destruction.

People look exclusively at treasury yields, but it’s the amount of interest that they pay, the coupon rate, that matters fiscally, as this is the amount of interest that the Treasury pays on this interest. The coupon rate is currently at 2.4%, what they have to pay to entice investors to buy these things, and this coupon rate is less than half of the historical average.

The Needle is Already Well in the Danger Zone As it Is

The burgeoning debt that currently stands at about $28 trillion or this $222,000 per taxpayer adds up to an interest payment of about $5,300 per taxpayer, and adds an expenditure of $672 billion to the budget. Of our overspending, this accounts for two thirds of our typical deficits of a trillion dollars a year, not a trivial amount by any means.

By overstimulating the economy by spending trillions more than this per year, this weakens the fiscal position of the country and in itself has an upward pressure on rates, aside from the inflationary effects. The United States may still be the strongest country in the world economically, but as our recklessness accelerates, this causes investors to have less faith in our treasury debt instruments and causes them to put the price of our borrowing up.

When we add in what Biden and Company are going to be doing to us over the next few years, with their big ideas and blank checks, with no real checks and balances in play to stop or restrain them from greatly accelerating our fiscal demise, you can count on us paying a lot more in interest on this $28 trillion that is soon to grow a lot bigger.

In order to make debt amounts meaningful over time, we use percentage of GDP, and if GDP and debt grows in tandem, we haven’t improved things at all but at least aren’t going much further in the hole in real money. The $220 billion that we overspent during the second world war is a lot more money than $220 billion is worth today, and this took us up to an alarming 118% of GDP at the time.

We had this down to 62% of GDP before Obama took over, and by the time he was out of office, he took us back over 100% for the first time since WWII. We recovered from the last triple digit incursion by simply not spending anywhere near as much as we did during this war, but this time the war isn’t going away anytime soon, especially with Obama’s sidekick now on the throne.

The 104% that Obama left us with only increased by a bit during the first three years of Trump’s reign, to 106%, then 2020 came. If the 143% that we are at now doesn’t scare you, and it should scare you a lot, what’s coming next is even scarier.

The way back to sanity would be to see the economy grow faster than this debt and at least get us into a less dangerous position, but that’s not the plan at all, and the Democrats plan on doing the opposite, declaring total war on the country’s debt and looking to truly escalate us toward our day of reckoning

The projections of our debt for the next 10 years and beyond was startling enough, but the game is really on now and the only thing left to speculate on is how bad it will be, but we already have a good idea when we look at the wish list of this party, all major frontal attacks on our economic survivability. We already knew that the clock will run out on us at some point, but that point will be coming much sooner now, and this is not a guess, it’s now a certainty.

The saddest part of all this is that this is going on well under the level of awareness of voters, who are choosing this path to destruction without a care in the world it would seem, where they have their hands out and do not realize where this is all headed. We do a terrible job of educating our people on the importance of fiscal responsibility and see them worrying excessively about things like the risk of global warming but do not have a clue that fiscal warming is far more dangerous.

They vote for people like Biden and his reckless friends and think that this is preferable to the more responsible actions of the other party, as they excitedly wait for the pinata to be bashed so they can collect their candy but miss that their own heads are being used as the pinata. They are so drunk with hatred that they do not even realize that they have chosen themselves to be attacked, and when the party ends and our country collapses, they still probably won’t know who to blame, not having a mirror handy perhaps.

There is a lot to be concerned about politically as we enter 2021, but even the movement toward totalitarianism pales in comparison to what this escalation of fiscal recklessness will bring, setting us on a course toward the black hole, and getting us close enough soon that there will be nothing to do but to wait to die economically.

We can only borrow so much, as this money does not grow on trees or is just created out of thin air, as the Treasury needs to borrow more and more. With its appetite to borrow continuing to increase at such an alarming rate, it will only be a matter of time before they exhaust the ability to keep up this borrowing, leading to a financial apocalypse that will bring all of us to our knees and even kill more people than any pandemic ever could.

We are left to guess how bad the complete collapse of the U.S. government would be, but it would lead to a catastrophic failure of the entire world economy, many times worse than the worst fears we had during the economic crisis of 2008. That could have caused some real damage but this one is simply game over for us.

Those who are fearful of what handing over the entire keys to the castle will do for the country need to understand just now serious of a risk this is, and we’re even at the point that referring to this as just risk isn’t appropriate anymore, because this risk has come home to roost as they fully intend to explode the bombs they have at the ready.

The people need to come to a much better understanding of how dire our predicament currently is and how much more harm we can do to it, and the level of awareness presently is so minimal that there may not be much to hope for.

Fortunately for us, there are other metrics that we can use to measure the economic harm that our prodigal grandpa has in store for us, and the one that has more people out of work and our economy in decline is at least a language they understand.

His plans to do things like raise taxes and the minimum wage will do just fine, as this will bash things enough to make people realize that they are worse off, with enough of them wanting to turn back the clock to perhaps turn the tide and at least have the checks and balances that bipartisanship provide to protect us against at least the more egregious elements of this planned economic and fiscal sabotage. In the meantime, God help us.



Monica uses a balanced approach to investment analysis, ensuring that we looking at the right things and not confined to a single and limiting theory which can lead us astray.

Contact Monica: [email protected]

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