Greetings!,

Have you ever been in debt? If you're like me, buying your home or a new car may have required you to take out a loan to make the purchase.

Have you ever been $40 trillion in debt? That is 40, followed by 12 zeros. $40,000,000,000,000. Last week our federal government arguably crossed the above number for the first time.

It may surprise you to know that under the Clinton administration and the first year of the George W. Bush administration we actually had a government surplus. How, then, did we get so upside down on our finances? Like many spendthrifts, it was not just one thing.

Referring back to the article by JP Morgan economist Dr. David Kelly (I will post the link below), it was a combination of things. These include 3 wars, an economic collapse, a worldwide pandemic, decreasing revenue from retiring baby boomers, and increased social spending.

Since no politician really seems to want to curtail spending, I am not sure we will see any solution any time soon. As in the Social Security funding issue, the topic will most likely get pushed down the road until we have no choice but to deal with it.

If you would like to read the full item from Dr. Kelly, I have posted a link here.

I do believe Warren Buffet was right (as stated in my blog on 7.24.26), His solution: "You just pass a law that says that any time there’s a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election."

As always, thanks for reading.

Bernie & Chad

1 Dr. David Kelly, Notes on the Week Ahead, 8.25.26