The Case of the Clock That Doesn’t Tick: Is That All There Is? – Part I
The tick-tocking normally associated with traditional clocks is missing from this particular instrument because it is hardly traditional. For one thing, it’s 11’ x 26’ in size; for another, it does not show the time of the day. It also lacks the usual clock hands, instead registering its information in boxes with lighted numbers that change relentlessly, for the moment ever upward. Yet, when viewing the message that is emitted, combined with the silence (due to its digital mechanism) the so-called clock is strangely ominous.
The clock in question, although mostly unnoticed, was positioned in the Times Square area in Manhattan for some 20 years thus attaining something of a landmark reputation, and is known as the “National Debt Clock.” It was originally installed in 1989 by Manhattan real estate developer, Seymour Durst as a way of educating the American public to the country’s escalating national debt. Mr. Durst died in 1995, and the clock was inherited by, and still maintained by his son, Douglas.
At the time of the original installation, the clock (that looks like an advertising sign), the national debt was some $2.7 trillion. Accordingly, 13 spaces were allotted to accommodate that number, and one additional space (the first one) showed the dollar symbol. As time progressed and the debt number increased, a space problem was certain to befall the clock. Sure enough, on September 30 th, 2008, the nation’s debt exceeded a limit probably never imagined by the clock’s designers some 19 years prior. Because the new number, $10 trillion, required 14 spaces, the number 1 replaced the dollar sign which was then painted in front of the “1”. A new clock sign, with spaces enough to accommodate as much as (God forbid) $1 quadrillion will soon be installed.
To see the debt clock in action, go to usdebtclock.org and watch the streaming number as the nation’s debt approaches $11 billion, and will continue to go higher as the full impact of the stimulus recovery package takes effect. It is virtually impossible for anyone to truly comprehend a number of that magnitude. Just six months ago I commented on that very subject. For those who might have missed it, allow me to repeat one effort made at that time to make the figure 1 trillion more comprehensible.
“Let’s start with one billion [dollars]. If you spent $1,000 a day every day without fail, you would spend $365,000 in a normal year. You would spend $36,525,000 in a century. So, if you started spending $1000 a day starting January 1, 0000, you would be spending $1,000 per day through the end of the Roman Empire, the collapse of the Mayan civilization, the Middle Ages, the Crusades, the Black Plague, the Renaissance, the European conquest of the New World, the Industrial Revolution, the American Revolution, the French Revolution, the Russian Revolution, World Wars I and II, the Cold War, the end of the 20 th Century, and would finally reach one billion dollars a little more than one-third of the way through the 28 th century. Now, repeat that 999 more times and that gets you to one trillion dollars.” (To get to $11 trillion, that effort would have to be repeated 11,000 times). Scary isn’t it?
As mentioned earlier, when the clock was installed in 1989, it showed a debt of $2.7 trillion. Almost 20 years later it is four times that number. In 2000 our debt actually began to decrease and the numbers were running backward. Mr. Durst happily shut the clock down. In 2002, under the then recently elected administration, the numbers were once again increasing rapidly and the clock was restarted with a debt number just above $5 trillion. Thus, in less than a seven year period the national debt has doubled.
The clock shows that currently our public debt is increasing at a rate of $10,000 a second, or $1,200,000 every two minutes. That means our debt is growing at the astonishing rate of $315.36 billion, dollars a year. At this point every American family is responsible for close to $100,000 that is owed to, amongst others, a great number of Chinese and other foreign nations.
Another common method of comparing our debt is to relate it to the country’s Gross Domestic Product or GDP; the lower that relationship, the more efficiently is the economy running. The following graph displays the historical record over 58 years, encompassing eight presidential administrations and 11 presidents. During the period, extending from the end of World War II to 1982, our country was decelerating from our extraordinarily high war-time debt (a ratio of 122). Half of those years saw Democrats in power and half Republicans, indicating that a concerted effort was made, regardless of party affiliation, to reduce the debt and/or increase productivity. As a result, during that period, the graph shows the debt decreased from 90 percent of GDP to about 33 percent.
The Reagan, H.W. Bush years however, reflect a doubling of the ratio of debt to GDP from that 33 percent to about 66 percent. That rise continued through the first half of the Clinton years at which time the ratio declined to around 58 percent. However, the G.W. Bush years once again shows an increase in ratio numbers to a level not seen in over half a century. Remember this graph shows figures only through September 30 th, 2008, and does not reflect the astounding debt we have accumulated as a result of the bank bailout and the new stimulus recovery package.
Allow me to interrupt this discussion by pointing out that this year we are celebrating the 120 th anniversary of the coining of an expression that does have a relationship to this article. It was in 1849 that Thomas Carlyle created the derogatory alternative description of Economics as the “dismal science.” In fact, he wrote, “…a dreary desolate, and indeed, quite abject and distressing one [science]; what we might call, by way of eminence, the ‘dismal science.’” (Had I read that before I chose my undergraduate college major, it might have been other than Economics.)
I mention that here because I recognize that regardless of its importance, too many numbers in an article can be boring, and sometimes confusing. Therefore I’ll save Part II of this one for next month, except for this teaser: Some of you might remember a song that debuted exactly 40 years ago, winning a Grammy for Peggy Lee as she sang the lyrics, “Is that all there is? Is that all there is? If that’s all there is my friends, then let’s keep dancing. Let’s break out the booze, and have a ball. If that’s all –– there is.” Well my friends, if an eleven-trillion dollar debt is all there is to worry about, we might just follow Peggy Lee’s advice –– dance and have a ball –– because I’m afraid the situation is significantly worse. How about 5 times worse? See you next month.