At Powerline, Apparently Interest Payments Vs Defense Spending As Percent Of GDP Is "A Thing" -- March 24, 2023

Apparently this is "a thing" over at Powerline this week. A reader sent me this link as that site's chart of the day. Again, the chart was provided without context, one of my pet peeves.

Peter Zeihan addresses this, and I've talked about it many, many times on the blog.

A bit of context:

 

Spend some time on the graph:

• of the nine countries opposite the US, several exceed Russia's spending; those spending less than Russia barely spend less, and include: Germany (shame, shame),  the UK (shame, shame), Japan (which has constraints following WWII), South Korea (who has only one adversary);
• Saudi Arabia spends almost as much as Russia;
• China spends almost 5x what Russia spends:
• I believe Russia has one a/c carrier;
• the graph does not depict "bang for buck"; my hunch: US weaponry and quality of troops far exceeds any of the other nine and against Russia, there's absolutely no comparison;
• India? #2 behind China? I would not have guessed.

Compare the green graph (below) with the Powerline graph at the top. 

• US military spending represents less than 5% of the country's GDP;
• non-defense spending in the US is trending toward that of 2010, as percent of GDP;
• from wiki:

US interest payments as percent of GDP, according to Powerline graph: 3.5%.

Ask yourself, as a percent of a typical American's net worth, what percent is tied up in interest payments, including interest on vehicles, credit cards, and housing?

• average debt
  
• if one takes $60,000 as the average debt of an American adult
• two in a household, $120,000 -- average debt of an American couple
• and then one takes average net worth of a two-person household at $600,000,
• one gets
• one adult debt ($60,000) / net worth per household: 10% interest payments vs net worth;
• for a two-adult household ($120,000) net worth per household: 20% interest payments vs net worth
• my numbers may be way off, but that's fine: use your own numbers; start with these two sites:
• average debt;
• net worth;

Then consider that San Francisco, as a city, feels so rich, it's ready to give a million bucks in reparations to a bunch of folks ($1 million / individual -- and that amount is being negotiated upward).

Had I been asked about the Powerline graph before seeing it, I would have expected it to be much worse. 

If you want to "impress" one's audience, one want to start the graph at 1975, not at 1925.

Non-defense spending as percent of debt:

• 1975: 14.85%
• 2025: 19%

I don't see a huge amount of difference, but then I'm always wearing oil-stained rose-colored glasses.

On another note, the energy situation in the US versus the rest of the world (the 21st century will be America's century) will widen the GDP gap between America and the rest of the world. By a lot. If US defense spending maintains at same percent of GDP the dollar amount spent by the US will be even greater than the nine next countries combined.