A Debt Ceiling Saga: Americans Devour Their Marshmallows
The debt ceiling agreement brings to mind the famous Stanford marshmallow experiment in deferred gratification.
In 1972, an experiment in deferred gratification was conducted at Stanford Univ. Children were given the choice of eating one marshmallow immediately or waiting a period of time for two marshmallows. When the test subjects were followed later in life, it was determined that those who had not deferred gratification were less successful as adults.
Does the same happen with nations? Are nations less successful if they don’t defer gratification and live within their means?
Well, the United States is in the middle of a decades-long experiment to determine the answer, and preliminary findings suggest that the answer is yes.
The recent debt ceiling agreement supports the findings.
Loons on talk radio are squawking that House Speaker Kevin McCarthy caved on the deal, although he struck the best deal possible given political realities. Loons in the left media are squawking that the cuts are too deep, although they are about as deep as the bone-dry Rillito River in my hometown of Tucson.
Trump acolytes are claiming that their idol had the economy in tip-top shape, conveniently forgetting that he had increased deficit spending by a trillion dollars and was a proponent of easy money.
Acolytes of Joe Biden, Bernie Sanders, Elizabeth Warren, and Alexandria Ocasio-Cortez are claiming that too little is spent on the poor. They conveniently overlook the fact that when entitlements, welfare, and tax credits are counted as income, the bottom fifth of Americans actually have more income than the next fifth and nearly as much income as the fifth after that.
Karl Marx said that religion is the opiate of the masses. Well, debt is the opiate of Americans.
Federal debt is currently a staggering 97% of GDP. To put that in perspective, imagine if your personal debt were 97% of your income.
Without the debt ceiling agreement, the federal debt was projected to be 119% of GDP in a decade. With the agreement, it is projected to be 115%, assuming that the agreement holds. Yeah, that’ll make a difference.
In terms of annual deficits, the agreement will mean that the deficit will be 4.6% of GDP in the year 2025. Without the agreement, it would’ve been 5%. Either way, that will keep the U.S. as a leader in deficits among Western countries with advanced economies. For example, the table below shows the projected 2025 deficit as a percentage of GDP for selected countries.
| Deficit | |
| U.S. without Debt Ceiling Agreement | 5.0% |
| U.S. with Debt Ceiling Agreement | 4.6% |
| Spain | 4.3% |
| France | 3.5% |
| United Kingdom | 3.3% |
| Australia | 3.1% |
| Japan | 2.3% |
| Italy | 2.0% |
| The Netherlands | 0.3% |
Source: “A Debt Deal That Doesn’t Deal with Debt,” by Greg IP, the Wall Street Journal, June 1, 2023.
No wonder 60% of Americans are overweight and 30% are obese. They gorge on marshmallows.
All but 15% of federal spending was taken off the table in the negotiations over the debt ceiling. Taken off the table were Social Security, Medicare, Defense, veterans’ benefits, interest on the debt, and taxes. Only nondefense discretionary spending was left on the table.
This was akin to a debt-ridden family trying to avoid bankruptcy by cutting back on restaurant meals while taking out a 72-month loan to buy a $60,000 pickup truck.
When did Americans lose that gizmo in their forehead that controls impulsiveness? Was it when TV commercials went from six an hour to over 30 an hour? Was it when the virus of social media killed brain cells? Was it when the Federal Reserve gave up on its founding mission of sound money in order to enable the government, and thus the people, to spend beyond their means? Or was it when frugality went out the window with women buying new jeans with rips in the knees?
There is no doubt about one development: The more Americans with college degrees, the less common sense, the less understanding of economics, and the less financial savvy. Colleges like it this way because it allows them to gouge students and to burden them with tuition loans while pretending to care about social justice.
Meanwhile, productivity has flat-lined in spite of new technology—or maybe because of new technology. Another possible explanation for the flat-lining is the new cultural norm of time off being more valuable than work. Still, another is the ever-increasing share of the workforce devoted to handling government red tape.
Paradoxes abound. On the one hand, spending by city, state, and national governments has shot up over the decades like a Space X rocket. The same for public schools. On the other hand, serious social and economic problems seem to be getting worse.
Homeless people are living and dying on the streets like animals in many American cities. A record number of Americans are dying of drug overdoses. Suicides and attempted suicides are on the rise among teens. Murders, drive-by shootings, car thefts, shoplifting, and general marauding have become cultural norms in some cities and hoods. K-12 test scores are a national embarrassment, especially among blacks, Hispanics, and working-class and rural whites. Sports gambling is a growth industry. Degenerates and dumbbells have risen to the top of sports, entertainment, and politics, where they have become role models for American youth. Under the guise of diversity, equity, and inclusion, old forms of racism and exclusion have been replaced by new forms of racism and exclusion. And chest-thumping Americans whose pride is hurt by China’s success are beating war drums, not realizing that a war with China would be suicidal.
And while all this is happening, America’s institutions are preoccupied and even obsessed with gender and sexual orientation, as if genitals are so important that they should be shoved in everyone’s face.
Woe to anyone who suggests that the decline in two-parent families and responsible parenthood might be a root cause of many of America’s socioeconomic problems. That’s a surefire way of being typecast and ridiculed as a born-again Christian, a right-wing reactionary, a simpleton, or, the strangest accusation of all, someone with white values.
That’s particularly strange in view of the fact that East Indians have the highest household income in the U.S. and also have high rates of marriage and low rates of divorce. Unsurprisingly, Indian households are 50% more likely to be headed by a married couple than the average for all American households.
Or maybe their success is due to disliking marshmallows.
