And now for the price tag:
Unfortunately, for buddy Adam Johnson from Bloomberg (whoever he is), this was not to "Avoid Armageddon", this money was squandered to dig a big fucking crater into which the Middle Class will be lowered and buried (aka. a grave) i.e. economic Armageddon has been no way avoided, it has only been briefly delayed and of course amplified 10x by the figures indicated above.
Government Debt (accumulated deficits)
The Government debt of $15.5 trillion has increased by $6.5 trillion (72%) which equates to an increase of $22k for every man, woman and child in the U.S. Dividing the total debt ($15.5T) per person equates to ~$52k. On a per household basis, total debt is ~$135,000 which is nearly three times average family income !
Government Debt (accumulated deficits)
The Government debt of $15.5 trillion has increased by $6.5 trillion (72%) which equates to an increase of $22k for every man, woman and child in the U.S. Dividing the total debt ($15.5T) per person equates to ~$52k. On a per household basis, total debt is ~$135,000 which is nearly three times average family income !
Ongoing deficits
As you see the budget deficit has increased by over a $1 trillion per year since 2007, which raises the key question: what are taxpayers really getting for this money? Let's see, take a trillion dollars and divide it by $50k to see how many jobs this equates to and you come up with 20 million. You read that right - adding an extra $1 trillion to government spending each year is the equivalent to 20 million jobs, each paying $50k/year (I realize that median job income is not $50k, but hey, I am a generous guy...).
And yet, for all that, how many net new jobs did the U.S. add in the past 4 years? First off, we need to account for all of the jobs lost in the 2008/2009 recession. According to this article, roughly 8 milion jobs were lost. But no worries right, because by increasing government spending by a net $1 trillion, we should still have (20 - 8) = 12 million net new jobs, right?
Unfortunately, the government is not quite that efficient. Instead of creating 12 million net new jobs, there are still 5.5 million fewer jobs today than there were 4 years ago. Therefore, we only added 2.5 million new jobs since the end of the recession v.s. the 20 million that would have been added if we just used the $1 trillion to pay for those jobs directly. That's what happens when you first run your money through the government, you take essentially an 90% haircut. Or put it more directly, dividing $1 trillion by 2.5m jobs, means each new job created, cost taxpayers $400k. Get me one of those jobs ! As always, you can't make this shit up. This is the least efficient, least competent government in the history of the planet - without any comparison whatsoever.
Best Stock Market Rally Money Can Buy
So now the question, what did taxpayers get for the $2 trillion the Federal Reserve squandered (Fed Balance Sheet)? The basic math above shows that they clearly didn't get anything resembling a sustainable economy. As I mentioned recently, this stock market seems to be eerily reminiscent of March 2000, exactly 12 years ago. Back then the market was led by the Nasdaq, and here again now the Nasdaq is leading, albeit on a muted scale. I would refer to this as an echo tech bubble fed by cheap money from the Fed Quantitative Easing (QE) debt monetization programs and the European equivalent (LTRO). I realize this (below) is a busy chart, so a few explanations are in order. I drew the blue square and the red square to show how long it took to reach the same level (2250) first during the 2003-2007 rally (blue square) v.s. the current rally (red square) i.e. 4.5 years v.s. 1.75 years. That answers the question, where did the Fed money go - it was nitrous oxide to the stock market. More to the point, on the right hand side, the blue trend lines show the periods when QE1, QE2 and LTRO were in effect i.e. the periods where the market was essentially going straight up.
FYI, the ECB's LTRO2 monetization program just ended, so the rocket ship has run out of fuel and is now in outer space (far right) i.e. extreme overbought. There is a saying on Wall Street "Mo In, Mo Out", translated as "Momentum In = Momentum Out".
Booyah Skidaddy !!!
