According to the US Department of Labor, 576,000 people filed for initial unemployment claims in the most recent reporting period. That figure is the lowest since March 14, 2020, when new claims totaled 256,000.
Though both finished lower on the day, Bank of America (BAC) and Citigroup (C) reported large earnings beats for the first quarter of 2021, largely by drawing down loan loss reserves. The reserves go straight to the bottom line, which is a neat accounting trick in vogue this earnings season. JP Morgan Chase used it to report a near-400% year-over-year EPS gain on Wednesday. While accounting gimmicks may boost a company's bottom line over the short run, they're essentially one-off events, an understanding by Wall Street which resulted in sending the bank stocks lower.
Banks and other companies have to report to shareholders, but that's not the case for the free-spenders in Washington, DC. Congress managed to set two new records in March, neither of which should be cause for celebration by US "shareholders", the American public.
In March 2021, the feds took in $267 billion in tax receipts but managed to spend $927 billion, producing a monthly deficit of $660 billion. The nearly $1 trillion in spending and the mammoth deficit are both record amounts. If the US government was traded publicly as a stock, in normal times it would be drug down and beaten by the Wall Street establishment and be begging for bids.
These, however, are not normal times. The spending and deficit are just more proof that the federal government is completely out of control, about 10 times as large as it should be, and that the people who pass these spending bills don't share an ounce of financial discipline between the lot of them.
The $660 billion just gets lumped into the burgeoning national debt, already at $28 trillion and growing by nearly a trillion dollars per quarter presently.
Media types often blame presidents for growing the debt, but it's congress that has to approve the spending. The president just signs it away, figuratively blowing up the budget with the stroke of a pen. The past few White House occupants have presided over massive spending. Under George W. Bush, the debt nearly doubled, rising from $5.67 trillion in 2000 to just over $10 trillion in 2008. Barack Obama's eight years (2008-2016) nearly doubled it again, to $19.57 trillion. Donald Trump, in his four years, was nearly on track for another doubling had he won a second term. Through fiscal year 2020, the federal debt stood at $26.9 trillion.
Under Biden, his congressional team has been hard at work bankrupting the nation. This year's deficit is already $1.7 trillion, through the first six months of fiscal 2021, and it looks as though it will top the prior year's record of $3.3 trillion. The total debt will be close to, if not beyond, $30 trillion.
Making it personal, since technically, US citizens are on the hook for all this debt (thank you, politicians!), it will amount to over $90,000 per person. To say that we're in debt up to our eyeballs would be an understatement. The country is underwater and drowning and there's no way that massive debt is ever going to be repaid, making all Americans nothing more than debt slaves.
Regardless of the fact that slavery in America was abolished more than 150 years ago, the simple fact is that our own government has run up a debt that puts every man, woman, child, and even unborn generations into financial chains, and we can blame politicians for nearly all of it. In 1913, the year the Federal Reserve System was approved as a central bank by congress and then-president Woodrow Wilson, the total accumulated national debt was just short of $3 billion. The government now spends that in a matter of hours.
World Wars I and II, plus the Great Depression began the borrowing blowout. By 1946, the debt had risen to $269 billion. We scoff at these numbers today as inflation (otherwise known as debasing the currency) has driven economic reality to extremes. Still, in the first 33 years of the Fed, the banking elites had managed to increase the national debt nearly 100-fold. It took another 75 years to increase the debt another 100-fold, putting the government into its present state of insolvency. At the current pace, which happens to be approaching hyperbolic, the government will be borrowing $7 to $10 trillion a year by 2030 and the debt will have risen at least to $65-75 trillion.
Last year, fiscal 2020, interest on the debt alone accounted for more than $500 billion, and that's at ridiculously low interest rates. The size of the federal debt and annual deficits are a primary reason interest rates can never go up again, at least not until some basic laws of mathematics are repealed.
Congress should get to work on that... right after they pass another spending bill and take another two-week recess.
AT THE CLOSE, THURSDAY, APRIL 15, 2021:
Dow: 34,035.99, +305.10 (+0.90%)
NASDAQ: 14,038.76, +180.92 (+1.31%)
S&P 500: 4,170.42, +45.76 (+1.11%)
NYSE: 16,116.85, +116.70 (+0.73%)
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