Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: November 1st, 2021 | 0 Comments

AFTER TEN MONTHS OF 2021 – With just 2 months to go in calendar year 2021, the S&P 500 is up +24.0% YTD (total return) as of the close of trading last Friday 10/29/21. Over the last 30 years (1991-2020), November and December have ranked as the # 2 and # 3 “best months” for the S&P 500. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

BILLIONS – As of the close of stock trading on Monday 10/25/21, Elon Musk was worth $255.2 billion, the first American ever to exceed $250 billion in net worth (source: Forbes).

STAGGERING WEALTH – An individual spending $10 million a day would consume $250 billion in 68 ½ years (source: BTN Research).

TAXES – The “millionaire’s surtax” proposed by President Biden on 10/28/21 would impose a 5-percentage point surtax on adjusted gross income over $10 million plus an additional 3 percentage points (for 8 percentage points in total) over $25 million of adjusted gross income. An estimated 30,000 US tax filers (out of an estimated total of 144 million returns) are projected to make at least $10 million in the 2022 tax year (source: Tax Policy Center).

BACKDATE – Tax reform legislation signed by President Clinton on 8/10/1993 retroactively increased marginal tax rates back to 1/01/1993, the last time a retroactive tax increase occurred in the USA (source: Congress).

NEW HOMES – The median sales price of a new home sold in the USA in September 2021 was $408,800, a record high both on a nominal basis and on an inflation-adjusted basis (source: Census Bureau).

WE SPEND – 10 years ago (fiscal year 2011), the government spent $486 billion on Medicare, $731 billion on Social Security, and $227 billion for debt interest. During fiscal year 2021, the government spent $696 billion on Medicare, $1.135 trillion on Social Security, and $352 billion for debt interest (source: Treasury Department).

CHEAPER – The average interest rate that the government pays on its interest-bearing debt as of 9/30/21 was 1.605%, down from 2.492% as of 9/30/19, allowing the USA to borrow 55.3% more money today than it borrowed 2 years ago and still have the same out-of-pocket interest expense cost (source: Treasury Department).

JOBLESS BENEFITS – 24% of the outlays of the government, i.e., $1.649 trillion out of $6.818 trillion, during fiscal year 2021 were payments for “income security,” i.e., 6 different programs that keep Americans “healthy and safe,” but mostly unemployment benefits. 12% of the outlays of the government, i.e., $515 billion out of $4.447 trillion during fiscal year 2019 (pre-pandemic) were payments for “income security” (source: Treasury Department).

DIFFERENT REASONS – From the beginning of the pandemic (approximately March 2020) through 6/30/21, an estimated 3 million American workers retired earlier than US historical trends would have forecasted. These “excess retirees” were mostly older workers, some concerned about the risk of getting infected while continuing in the workforce. Others attributed the surging value of homes and stock portfolios as the driving force that made an early retirement possible (source: Federal Reserve Bank of St. Louis).

THAT WAS QUICK – When President Biden signed a debt ceiling bill that added $480 billion to our existing debt ceiling on 10/14/21, the limit was raised to $28.9 trillion. Projections released by the White House at that time had Congress breaching the new limit on 12/03/21 or 7 weeks later. As of 10/22/21, just 8 days after the debt ceiling was raised, our nation’s outstanding debt hit the new ceiling of $28.9 trillion (source: Treasury Department).

STRONG BANKS – As of Saturday 10/23/21, the last bank in the US to require a bailout from the Federal Deposit Insurance Corporation (FDIC) was the Almena State Bank of Almena, KS on 10/23/20 or 1 year earlier. That’s the 3rd longest stretch without a bank failure in the United States since the year 2000. In calendar year 2010 alone, 157 banks required a bailout from the FDIC (source: FDIC).

KEEPING SCORE – Germany is the 4th largest economy in the world ($4.3 trillion). The USA is the largest economy in the world ($23.2 trillion), worth more than 5 times the size of Germany (source: Research FDI).

JUST IN CASE – Wyoming has a “rainy day” fund of $1.1 billion, enough to cover the state’s daily operating expenses for 301 days, longer than any other US state (source: Pew Charitable Trusts).

LET’S KEEP PLAYING – College football implemented the use of overtime to determine a game’s winning team in 1996 (25 years ago). Penn State, 7th ranked in the AP football poll, lost to unranked Illinois 20-18 on Saturday 10/23/21 in 9 overtimes, breaking the previous record of 7 overtimes achieved 5 separate times (source: NCAA).