This blogbook offers, with the aid of various charts, graphs, and tables, a pictorial guide to the 2008 financial crisis.
The Two National Debts
How big is the national debt? $10.3 trillion? $5.8 trillion? Both those figures are bandied about, and both, strangely, are accurate in their way. The reason is that the government keeps two sets of accounts: the General Fund and various trust funds, the largest of which are Social Security and Medicare.
This chart is a snapshot from the moving clocks at zfacts.com, which are a wonder to behold. Clicking on the link (scroll down) shows a General Fund running deeper in the red and the trust funds as accumulating surpluses, such that the net national debt is now $5.8 trillion.
We know, however, that there will come a time when the trust funds for Social Security and Medicare turn from generating surpluses to deficits. The surpluses now accumulated, moreover, are not sufficient to cover the retirement needs of the baby boomers, and both Social Security and Medicare face severe long term funding problems. It is therefore reasonable to segregate the general fund from the retirement funds in estimating the national debt--that is, to place it at $10.3 trillion.
That figure is the debt we have accumulated to run the government, fight our wars, pay interest on the debt, and bail out our bankers. It, rather than $5.8 trillion, is the most apt figure for estimating the size of the public debt. As the national debt clock illustrates, that $10.3 trillion figure is growing rapidly. I mean, $16,637,366 in 174 seconds is pretty darn fast. But as the next chart shows, the $10.3 trillion figure actually understates the true dimensions of the fiscal gap.
To see the presentation in order, use either the Labels below for each chapter or the Table of Contents for individual entries.
The initial presentation was made in October 2008 and was last updated in January 2009, though I recently substantially expanded the list of sources. Lately, I have been working on a blogbook called Energy Predicament.
My dubious record for 2008 is reviewed here, by some miscreants.
FEELING GLUM AND OUT OF SORTS, PERHAPS A BIT ANGRY?
YOU HAVE EVERY RIGHT TO FEEL THAT WAY.
A good number of my charts first appeared at Contrary Investor. Though oriented toward investors, CI offers a superb analysis of the real economy and its relationship to the financial system. It is an indispensable source not only for individuals but also for any good library. So subscribe, dammit.