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Here's an interesting chart showing expenditures vs. receipts -- as a percentage of GDP. You can see the big spikes in expenditures due to WWI, WWII, and Covid, which was sort of like a war in that there was a large emergency spending campaign, just as there was during the Great Recession of 2008.
Since outlays are well in excess of receipts, these huge temporary expenditures are financed by issuing debt and printing money; you can't raise tax revenue that fast without all sorts of bad things happening.
Whenever there is a "temporary" spike in expenditures -- WWI, WWII, 2008, Covid -- you see permanent expenditures ratchet upward. They don't ever fall back to the level before the emergency expenditure.
After WWI & WWII, there was a period of excess receipts, which helped pay down the war debts. This didn't happen after 2008 or after Covid: politicians kept spending higher than receipts.
And, of course, WWI & WWII were also financed in part by significant inflation, inflating away government debt. The price level DOUBLED from 1916 to 1920 -- yikes! After WWII, inflation started at about 8% rising to nearly 20% in 1948. In both cases, recessions helped bring the rate of inflation down thereafter.
Regarding Covid expenditures: we've seen this movie before in the aftermath of WWII and WWII.
Here's an interesting chart showing expenditures vs. receipts -- as a percentage of GDP. You can see the big spikes in expenditures due to WWI, WWII, and Covid, which was sort of like a war in that there was a large emergency spending campaign, just as there was during the Great Recession of 2008.
Since outlays are well in excess of receipts, these huge temporary expenditures are financed by issuing debt and printing money; you can't raise tax revenue that fast without all sorts of bad things happening.
Whenever there is a "temporary" spike in expenditures -- WWI, WWII, 2008, Covid -- you see permanent expenditures ratchet upward. They don't ever fall back to the level before the emergency expenditure.
After WWI & WWII, there was a period of excess receipts, which helped pay down the war debts. This didn't happen after 2008 or after Covid: politicians kept spending higher than receipts.
And, of course, WWI & WWII were also financed in part by significant inflation, inflating away government debt. The price level DOUBLED from 1916 to 1920 -- yikes! After WWII, inflation started at about 8% rising to nearly 20% in 1948. In both cases, recessions helped bring the rate of inflation down thereafter.
Regarding Covid expenditures: we've seen this movie before in the aftermath of WWII and WWII.
I agree, prices aren't coming down. People waiting to buy something will not be happy
Here's an interesting chart showing expenditures vs. receipts -- as a percentage of GDP. You can see the big spikes in expenditures due to WWI, WWII, and Covid, which was sort of like a war in that there was a large emergency spending campaign, just as there was during the Great Recession of 2008.
Since outlays are well in excess of receipts, these huge temporary expenditures are financed by issuing debt and printing money; you can't raise tax revenue that fast without all sorts of bad things happening.
Whenever there is a "temporary" spike in expenditures -- WWI, WWII, 2008, Covid -- you see permanent expenditures ratchet upward. They don't ever fall back to the level before the emergency expenditure.
After WWI & WWII, there was a period of excess receipts, which helped pay down the war debts. This didn't happen after 2008 or after Covid: politicians kept spending higher than receipts.
And, of course, WWI & WWII were also financed in part by significant inflation, inflating away government debt. The price level DOUBLED from 1916 to 1920 -- yikes! After WWII, inflation started at about 8% rising to nearly 20% in 1948. In both cases, recessions helped bring the rate of inflation down thereafter.
Regarding Covid expenditures: we've seen this movie before in the aftermath of WWII and WWII.
The bolded is absolutely correct. This is why Winston Churchill said "Never let a crisis go to waste". Crisis is always a great opportunity to concentrate power and control in fewer hands.
Here's an interesting chart showing expenditures vs. receipts -- as a percentage of GDP. You can see the big spikes in expenditures due to WWI, WWII, and Covid, which was sort of like a war in that there was a large emergency spending campaign, just as there was during the Great Recession of 2008.
Since outlays are well in excess of receipts, these huge temporary expenditures are financed by issuing debt and printing money; you can't raise tax revenue that fast without all sorts of bad things happening.
Whenever there is a "temporary" spike in expenditures -- WWI, WWII, 2008, Covid -- you see permanent expenditures ratchet upward. They don't ever fall back to the level before the emergency expenditure.
After WWI & WWII, there was a period of excess receipts, which helped pay down the war debts. This didn't happen after 2008 or after Covid: politicians kept spending higher than receipts.
And, of course, WWI & WWII were also financed in part by significant inflation, inflating away government debt. The price level DOUBLED from 1916 to 1920 -- yikes! After WWII, inflation started at about 8% rising to nearly 20% in 1948. In both cases, recessions helped bring the rate of inflation down thereafter.
Regarding Covid expenditures: we've seen this movie before in the aftermath of WWII and WWII.
One very important thing that you have to keep in mind is the cost of debt service when it concerns Fed ownership of US debt. Because with the Fed, almost all the interest they receive reverts back to the Treasury by law. Since the 2008 crash, a large amount of of new US debt is owned by the Fed. So effectively about $5T of our national debt has almost no net debt service.
The bolded is absolutely correct. This is why Winston Churchill said "Never let a crisis go to waste". Crisis is always a great opportunity to concentrate power and control in fewer hands.
This is why anytime there's a crisis, everyone above GS-15 should be immediately fired.
Peter Orzog, former Director of the Office of Management and the Budget under President Biden recently tweeted this interesting chart:
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