By pathdoc @Adobe Stock
A Roaring Success
How will the next president of the United States be able to handle the job?
In a note to clients, Jason DeSena Trennert of Strategas details the bleak portrait of the federal fisc:
It took Uncle Sam 232 years to accumulate its first $10 trillion in debt, nine years to accumulate its second, and five years to reach its third. The trip from $33 trillion to $34 trillion in debt was a short one, requiring only three months, from September to December of 2023…
If having $34 trillion in debt wasn’t enough, the Treasury department funded itself with short-term debt at a time of secularly low interest rates. More than one-third of America’s debt matures in the next year, resetting at higher rates and increasing the debt load by higher interest expenses alone.
James Freeman in the WSJ details how Calvin Coolidge put DC on a diet. Coolidge reduced federal debt by a third, but “it wasn’t just about starving the Beltway beast.”
In the Coolidge Review, John Cochrane explains the beautiful, peaceful revolution that only occurred because Washington did not interfere:
At the beginning of the 1920s, about 30 percent of American homes had electricity. By the end of the decade, nearly 70 percent had been electrified…
Electricity improved during that time, too, as alternating current, or AC, became standardized. With that came electric lights instead of kerosene lamps, and electric appliances such as the iron, the toaster, the washing machine, and the vacuum cleaner. Electricity revolutionized home life, removing much of the drudgery.
Electricity changed the economy as well. In 1914, only 30 percent of manufacturing was electrified; by 1929, that number had reached 70 percent.
How did electricity get to homes and factories? Was there a big federal program to build the massive infrastructure of power stations and wires needed? No, private utilities built it.
In 1920, 20 percent of people had automobiles; by 1929, 60 percent of families owned cars. There were 9 vehicles for every 10 households. The automobile revolution happened in one decade…
The transportation revolution didn’t occur because the federal government offered tax breaks and subsidies. There was no federal spending bill to build the network of gas stations motorists needed. No, the filling stations came in on their own when people figured out that they could make money operating them…
Average earnings rose 30 percent in a decade. Gross domestic product (GDP) rose by a third… This great economic and lifestyle revolution for Americans of modest means happened with basically no guidance from the federal government. The government largely stayed out of the way. And the government did not try to regulate improvement in the name of “equity.” Is it terrible that rich people got to buy a Model T Ford in 1924 and poorer people waited until 1927 to buy one at half the price? Would we look back and wish the government had slowed it all down in the name of equity?
Going Forward
Maybe, advises Mr. Freeman, we need to first consider the roaring success of a century ago.
