As we get closer and closer to election season, I find myself thinking more and more about the state of our union.  Just where do we stand as a country?  Are we on the right track?  Are we a healthy nation?  With all the noise out there, it’s hard to think clearly about the issue.  Depending on who you are talking to, this is either the best of times or the worst. 

Perhaps charts can help us see the truth.

Growth vs. Debt

In assessing the health of a nation, one of the main questions we have to ask is: to what extent are we taking care of the future?  A good way to think about this question is to compare economic growth with the rate of growth of our national debt:

On this measure, it looks like we are failing and failing badly.  Remember, that taking on debt essentially amounts to pulling forward what should be future consumption into the present.  While we get to spend now, one day the bill will come due.  In looking at the chart, the extent to which we are taking from the future is basically unprecedented, outside of the context of war.  We’re borrowing today like we’re in the midst of an existential crisis like the Civil War or the WWII.  But aren’t we at peace?

Economic Opportunity

Another thing we have to ask is whether our system is providing enough economic opportunity.  We know from history that one of the keys to the long-term success of a nation is some degree of shared prosperity.  While there’s never been a perfectly equal system of opportunity, some baseline minimum is required.  Basically, enough people need to either make-it or believe they have a reasonable chance of doing so.   It’s hard to put a percentage to it, but history has shown that there is clearly some minimum threshold here.  So, how are we doing on this front?

Not so good here either!  Inequality is basically running parabolic in the wrong direction.  For almost four decades now we’ve pursued policies that, while great for asset prices (e.g. QE, financial deregulation, Wall Street bailouts), haven’t been all that helpful for ordinary Americans.  How much farther can this go?   When is too much, too much? 

Housing Affordability

Another big issue is housing affordability.  Everybody needs a place to live and in democracies widespread home ownership is clearly the ideal.  While this is probably true of all nations, it’s uniquely important here in the US because all of our mythology around the American Dream.  The accessibility of home ownership is inextricably linked to the general emotional mood of America.  It’s hard for Americans to feel connected and dedicated to the national interest, if/when housing is so out of reach.  Unfortunately, this is another bad data point and trend for our assessment:   

Things haven’t been this bad in a long-time actually and they are trending decisively in the wrong direction.  We have to be close to breaking point here.  Remember, the last time affordability was this bad, mortgage rates were in the teens!   

Other Indicators

So far, we are 0 for 3 on our national health check.  We’re borrowing too much from the future, not providing enough economic opportunity, and failing miserably on housing.  Clearly, something is amiss with our economy.  How are things looking outside the economy?  Unfortunately, just as bad. 

Consider life expectancy:

Or the public perception of crime:

Or trends from life satisfaction surveys:

Americans are dying sooner, increasingly afraid of crime, and rather worried about the direction of the country.  Great news, right?  Interestingly, despite all of this, they remain pretty satisfied with their personal lives.  In my view, this is a direct result of the main issue we’ve been discussing week-in and week-out here at Profit+: that there is something very wrong with pursuing a purely self-oriented life.  We are better and bigger than that.  We can either wake-up to the reality of our responsibility voluntarily or be forced awake by crisis.      

Anyway, what a backdrop for 2024.  What our little health check has shown is that our country, the most powerful democracy in world history, is rather messed-up.  Unfortunately, we are about to have an election, where (if people are honest with themselves) the odds-on favorite matchup—a Biden v Trump redux—is actually something most people don’t want to see.  How can we live in a world where the presumptive nominees for the United States Presidency might not actually reflect the true will of the people?  Let that sit for a second.  My hope is that you will join me in doing the necessary and ennobling work of democracy, that you will take your stand for freedom, and that together we can create a better world.

Lastly, some housekeeping.  In honor of the Thanksgiving holiday here in America, we will not be releasing a podcast next week Tuesday.  The next email you will get from me is our regularly scheduled Profit+ issue a week from today.  Happy Thanksgiving!  

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