June 23
The United States is drowning in debt.
The U.S. must sprint for economic growth.
Please please hit the button to see ‘How does America's national debt today compare with the past?’
If the productivity of labor and capital in the nonfarm business sector grew 0.5 percentage points per year more quickly than CBO projects, federal debt held by the public in 2054 would be 124 percent of GDP not the 211% currently projected.
https://www.cbo.gov/publication/60169
Markets and Stocks
The economy is slowing but not sliding into recession. The S&P global flash pricing data correlates with the CPI. The latest reading suggests falling inflation. I remain positive about equities and Treasuries.
Nvidia is a great investment. I would be a buyer under $120. NVDA is trading around $127.
US services activity picked up marginally early this month to the fastest pace in more than two years while the outlook improved on cooler price pressures and prospects for lower borrowing costs.
The S&P Global flash June business activity index for service providers edged up 0.3 point to 55.1, the highest since April 2022. Figures above 50 indicate expansion. The gauge topped all estimates in a Bloomberg survey of economists.
Combined with a second month of expansion among manufacturers, the S&P Global composite purchasing managers gauge also ticked up to a 26-month high.
But
@Daily Chartbook posted: The personal savings rate has moved materially lower in the post-Covid era.
Still the wealth effect will cushion household consumption.
Economics
Accumulated deficits and too much Biden stimulus are causing elevated interest rates. Many Americans will never achieve the dream of home ownership.
As wage growth struggles to keep pace with home price inflation, buying a house has felt increasingly out of reach for millions of Americans recently — a trend that’s been ongoing for the last 3+ decades.
Indeed, in 2023, a typical home in America will cost buyers 4.9x the median income. That’s a 50%+ increase on the 3.1x price-to-income ratio averaged in 1990 and only slightly below the record figure set in 2022, according to new analysis from the Harvard Joint Center for Housing Studies.
Home to income ratio
Furthermore, this is a phenomenon that’s happening almosteverywhere: a whopping 378 out of the 384 American Metropolitan areas (98.4%) that Chartr analyzed from the Harvard report saw rises between 1990 and 2023. Just 2 areas reported a home-price-to-median-income ratio that was the same as in 1990 and only 4 reported a drop.
Inflation continues to be the factor in how Americans perceive the economy — and the cost of houses is a major factor in that sentiment. Across the US, home prices have surged by 47% since the start of 2020 and have more than doubled since 2010, based on data from the NAR cited in the report.
While new-home construction has fallen to a 4-year low, there’s also fewer existing homes entering the market. Rising interest rates have created a "golden handcuff" effect, discouraging homeowners from selling and taking on new, more expensive mortgages. Additionally, more homes are owned by older generations who are less likely to move. This has all culminated in a stark reality: you now need an annual income of $100,000 to afford a median-priced home in nearly half of all metro areas.
As for renters? The majority of them are already declaring the American Dream of homeownership dead. See Chart Daily.
Politics
Spending is the problem.
Spending has grown from 20.9 percent of GDP in FY 2019 to an estimated 23.9 percent of GDP in 2024.
Most of this recorded spending growth is due to the rising cost of interest payments on the national debt and non-health, non-Social Security mandatory spending.
Spending is projected to remain relatively flat through 2029 before growing to 24.9 percent of GDP by 2034.
Social Security, health care, and interest costs are each projected to rise by about 1 percent of GDP through 2034, while other spending is projected to fall by 2 percent of GDP.
Spending will total 24.1 percent of GDP over the next decade – significantly higher than the 21.0 percent of GDP average over the last 50 years.
https://www.crfb.org/blogs/government-spending-just-keeps-growing
The Supreme Court upholds restrictions on gun ownership by perpetrators of domestic violence. The vote was 8-1. Is the Court more centrist than progressives would have us believe, the obvious answer is Yes.
Sociology
Why is Anti semitism spreading across Europe and parts of the U.S. ? Anti semitism is learned behavior.
For the very progressive, the world is composed of oppressor and oppressed.
I think “what a croc of BS.” Of course I heard the same crap from 1969-1973 when I attended the University of Connecticut. Fortunately, I did not have to endure nonsense at Law School.
In the social sciences professors skew far left.
Claremont McKenna's Jon Shields summarized the basic trend in the Fall 2018 issue of this journal, finding that outside of economics, the percentages of conservatives in the social-science and humanities disciplines have dropped to the single digits. In my own field of political science, Harvard professor Pippa Norris has found that the cohort born in 1990 (the newly minted full professors of today) is considerably further to the left than those born in 1960 (those approaching retirement).
This means that a further drift leftward among the professoriate is already baked in as a result of generational replacement. At my own university, I would be hard-pressed to name a single tenured professor in the social sciences and humanities who is openly right of center in any reasonable understanding of the term.
The university's ideological narrowing has advanced so far that even liberal institutionalists — faculty who believe universities should be places of intellectual pluralism and adhere to the traditional academic norms of merit and free inquiry — are in decline. While we do not have good data on the rising cohort of graduate students, I have talked to faculty at several institutions who report that with each passing year, every class of admitted graduate students is further to the left of, and displays a more activist orientation toward scholarship than, the class preceding it. And of course, the graduate students of today are the junior faculty of tomorrow.
And in some of California’s K-12 schools, children are indoctrinated in Marxist ideology and critical race theory.
Fundamentally, California demonstrates what happens when a radical theory of education is put in practice. There are a handful of competing philosophies of education, and the most popular in schools of education is “critical pedagogy.” Its fundamental principle maps the Marxist oppressor-oppressed dichotomy on to the student-teacher relationship, concluding from there that the imposition of any content, any behavioral norms, any expectations is inherently oppressive. The teacher’s only role is to develop a child’s “critical consciousness,” to foster discontent with the current power structure and spur students into left-wing activism.
In most American schools, vestiges of a liberal-arts education remain: Kids practice academic skills, learn history and might even read excerpts of Shakespeare. But in California with its rejection of phonics, California has fully committed itself to a rejection of a liberal-arts tradition and fully embraced a radical agenda in its schools.