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Artemis Aerospace discusses the history of commercial flight and how global travel took off

Artemis Aerospace discusses the history of commercial flight and how global travel took off
PR Newswire
WISTON, England, Aug. 9, 2022

Flying has become the transport of choice for business travellers and holidaymakers across the globe and is now co…

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Artemis Aerospace discusses the history of commercial flight and how global travel took off

PR Newswire

Flying has become the transport of choice for business travellers and holidaymakers across the globe and is now considered one of the fastest, most convenient and safest forms of long-distance travel. But how did commercial flights go from being exclusively for the wealthy to the mainstream and affordable option it is today? Artemis Aerospace guides us through the different decades of air travel and how it has shaped modern-day living

WISTON, England, Aug. 9, 2022 /PRNewswire/ -- 

The first commercial flight

The first ever passenger flight took off in May 1908 when Wilbur Wright carried Charles Furnas just 2000 feet across the beach at Kitty Hawk in North Carolina. Just one year later, and the first airline in the world – German airship company DELAG – was founded.

In 1914, the world's first scheduled passenger service, an airboat piloted by Tony Jannus, set off from St Petersburg in Florida and landed at Tampa – around 17 miles away. The service only ran for four months, but it had unlocked the appetite of those keen to tap into the novelty of air transport.

A new era of aviation

However, it wasn't until the 1920s when commercial flights carrying paying passengers started to become commonplace with the introduction of the multi-engine aeroplane, the Lawson C-2, which was specifically built to carry passengers.

During this time, more and more start-up airline carriers were being established - some of which are still in operation today. These include KLM in the Netherlands (1919), Colombia's Avianca (1919), Qantas in Australia (1920) and Czech Airlines (1923).

Aircraft from this period would land frequently to refuel and fly at lower altitudes due to unpressurised cabins. This made travelling by plane noisy, cold and expensive. Flying times were lengthy and turbulence was frequent. Passengers regularly experienced air sickness and many airlines hired nurses to reduce anxiety and tend to those affected. 

In 1935, one of the world's oldest airlines, Qantas, operated its first international passenger flight, travelling from Brisbane to Singapore. From there, the British-owned Imperial Airways connected this flight to the UK. This was to set the wheels in motion for creating a regular travel route between Australia and the UK in the coming decades.

Despite flying being incredibly dangerous and extremely expensive during this period, it was still a fashionable way to travel for the rich. According to the Smithsonian National Air and Space Museum, the number of airline passengers grew from just 6,000 in 1930 to nearly half a million by 1934 - the aviation industry was well on its way to becoming hugely important to the global economy.

Innovation that revolutionised air travel

The introduction of the Douglas DC-3 in 1935 also had a big impact on the future of commercial flight. The propeller-driven airliner was a larger and much improved aircraft compared to its predecessors. Faster and more reliable, it could carry up to 32 passengers and had a cruising speed of 207mph with a range of 1500 miles. This made it popular with well-established airlines, including Delta, TWA, American and United, who soon added the aircraft to their fleets.

During the 1940s, the onset of WWII meant commercial aviation developments slowed considerably. However, by the end of the decade, the industry was heading towards a new era as Pan Am began operating its fleet of Boeing 307s, which featured the first ever pressurised cabin. This transformed air travel for passengers, allowing them to enjoy a comfortable experience at an altitude of 20,000 feet. Major airlines were now ramping up their advertising spend and offering travellers smooth journeys to far flung destinations and business hubs, including Pan Am's iconic New York to London route.

The Golden Age of Air Travel

The 1950s and 1960s heralded the age of the jet engine aircraft and with it came an upsurge in commercial flights, airline carriers and international flying routes.

Commercial air travel was booming, and major airlines were fiercely competitive, offering passengers more and more inflight perks, including lavish silver-service meals and fine wines.

The airline carrier Pan Am was a front runner in pioneering and marketing the very best air travel had to offer. It was the first airline to fly worldwide and introduced ground-breaking changes to the industry, such as adding jet aircraft to their fleets and utilising computerised reservation systems.

In the 1960s, work began on creating the world's first supersonic aircraft and what would eventually become an iconic symbol of commercial flight, the Concorde. Offering transatlantic flights in just 3.5 hours, the aircraft was a hit with business travellers and royalty alike. However, tickets were extremely expensive and only a privileged few could afford to travel via Concorde.

The rise of the no frills airline

Seeing a gap in the market for making air travel more accessible to everyday people, British-owned Laker Airways, which was founded in 1966 by Freddie Laker, was one of the first airlines to start offering a budget alternative by adjusting its inflight offer.

Using the budget airline business model that is commonplace today, Laker was able to offer lower price fares by reducing inflight services and luxuries, such as free meals. The airline also found innovative ways to reduce fuel consumption and engine wear by introducing the reduced thrust take-off technique and faster climbs to obtain the optimum flying altitude in as little time as possible. Sadly, the airline was a casualty of the 1980s' recession and subsequently went bankrupt. However, it had paved the way for budget travel and had opened a world of possibilities for millions more people to get the chance to travel by air.   

Today, the world's largest low-cost carrier is Southwest Airlines in the US. Synonymous with budget travel, the company's low-cost domestic and short haul offer has undoubtedly inspired many other well-known brands to tap into the no-frills market, including Ryanair and EasyJet.

Air travel for the masses

Larger and more economical aircraft, such as the Boeing 747, had also made cheaper air travel possible. Airlines were now able to carry more passengers than ever before, meaning ticket prices could be sold at a reduced rate. Holidaying abroad was no longer reserved for the rich.

This change in dynamics meant airlines now started to look for different ways to retain the luxurious service and long lunches that had been synonymous with the golden age of travel, without compromising on providing a budget alternative.

First-class cabins, sophisticated onboard bars and exclusive-use airport lounges meant those who could afford to, could still travel in style.

During the 1980s and 1990s, the budget airlines Ryanair and EasyJet launched. Offering airfares for as little as £20, they changed the face of commercial flying and put pressure on traditional carriers to lower ticket prices.

Security tightening in the 2000s

The tragic events of 9/11 had a profound effect on air travel. Security at airports was increased significantly and passengers without a ticket at US airports could no longer accompany friends and family through security to the gate.

Cockpit security also heightened. Previously, it had been possible for passengers to visit the flight deck and speak to the pilots. However, after 2001, cockpit doors were locked with only the pilots controlling who could enter.

A new era for air travel

According to the Bureau of Transportation Statistics, it took until 2004 for air passenger numbers to reach pre-9/11 levels and until 2007 to reach a record high.

During this period, low-cost carriers were experiencing increased demand as the popularity of booking websites surged and, by 2009, figures from the tourism research company PhoCusWright reported that half of all travel-related bookings were being made online.

Passenger numbers continued to surge throughout the 2010s and by the end of the decade the volume of travellers using commercial airlines was at an all-time high.

The post-pandemic era – flying into a new age for aviation

Prior to the pandemic, the International Air Transport Association predicted that the number of airline passengers could reach 7.2 billion by 2035. However, nobody in the industry could prepare for the global aircraft groundings and unpredictable travel restrictions caused by COVID-19.

Despite this, the industry is full of optimism. As we enter a new era for aviation, and reflect on the past, we can be confident that no matter what obstacles we encounter, air travel will prevail.

www.artemisaerospace.com

Sources

https://www.smithsonianmag.com/air-space-magazine/above-beyond-180962399/ 
https://en.wikipedia.org/wiki/Airline#:~:text=History- 
https://www.burnsmcd.com/insightsnews/publications/aviation-special-report/2011/timeline-of-commercial-aviation
https://www.loveexploring.com/gallerylist/86315/how-air-travel-has-changed-in-every-decade-from-the-1920s-to-today 
https://www.century-of-flight.net/commercial-aviation-industry-1920-1930/  
https://metroairportnews.com/travel-by-air-the-golden-years-1920s-1960s/ 
https://en.wikipedia.org/wiki/Douglas_DC-3 
https://en.wikipedia.org/wiki/Pan_Am 

Artemis Aerospace offers an innovative approach to component solutions for the aviation sector. Established in 1999, the company has earned a reputation for outstanding customer service by solving problems and providing a range of realistic options that offer customers the flexibility and freedom to choose a solution that suits their timescale and budget. Its services include component supplies, component repairs, lessor support, flight simulation hardware support, consignment stock management and global aircraft logistics.

With decades of expertise in global aviation logistics, the expert team works with trusted MROs, OEMs, and aftermarket suppliers around the world to offer 24/7 support to its global customer base.

www.artemisaerospace.com

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Shakira’s net worth

After 12 albums, a tax evasion case, and now a towering bronze idol sculpted in her image, how much is Shakira worth more than 4 decades into her care…

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Shakira’s considerable net worth is no surprise, given her massive popularity in Latin America, the U.S., and elsewhere. 

In fact, the belly-dancing contralto queen is the second-wealthiest Latin-America-born pop singer of all time after Gloria Estefan. (Interestingly, Estefan actually helped a young Shakira translate her breakout album “Laundry Service” into English, hugely propelling her stateside success.)

Since releasing her first record at age 13, Shakira has spent decades recording albums in both Spanish and English and performing all over the world. Over the course of her 40+ year career, she helped thrust Latin pop music into the American mainstream, paving the way for the subsequent success of massively popular modern acts like Karol G and Bad Bunny.

In late 2023, a 21-foot-tall bronze sculpture of Shakira, the barefoot belly dancer of Barranquilla, was unveiled at the city's waterfront. The statue was commissioned by the city's former mayor and other leadership.

Photo by STR/AFP via Getty Images

In December 2023, a 21-foot-tall beachside bronze statue of the “Hips Don’t Lie” singer was unveiled in her Colombian hometown of Barranquilla, making her a permanent fixture in the city’s skyline and cementing her legacy as one of Latin America’s most influential entertainers.

After 12 albums, a plethora of film and television appearances, a highly publicized tax evasion case, and now a towering bronze idol sculpted in her image, how much is Shakira worth? What does her income look like? And how does she spend her money?

Related: Dwayne 'The Rock' Johnson's net worth: How the new TKO Board Member built his wealth from $7

How much is Shakira worth?

In late 2023, Spanish sports and lifestyle publication Marca reported Shakira’s net worth at $400 million, citing Forbes as the figure’s source (although Forbes’ profile page for Shakira does not list a net worth — and didn’t when that article was published).

Most other sources list the singer’s wealth at an estimated $300 million, and almost all of these point to Celebrity Net Worth — a popular but dubious celebrity wealth estimation site — as the source for the figure.

A $300 million net worth would make Shakira the third-richest Latina pop star after Gloria Estefan ($500 million) and Jennifer Lopez ($400 million), and the second-richest Latin-America-born pop singer after Estefan (JLo is Puerto Rican but was born in New York).

Shakira’s income: How much does she make annually?

Entertainers like Shakira don’t have predictable paychecks like ordinary salaried professionals. Instead, annual take-home earnings vary quite a bit depending on each year’s album sales, royalties, film and television appearances, streaming revenue, and other sources of income. As one might expect, Shakira’s earnings have fluctuated quite a bit over the years.

From June 2018 to June 2019, for instance, Shakira was the 10th highest-earning female musician, grossing $35 million, according to Forbes. This wasn’t her first time gracing the top 10, though — back in 2012, she also landed the #10 spot, bringing in $20 million, according to Billboard.

In 2023, Billboard listed Shakira as the 16th-highest-grossing Latin artist of all time.

Shakira performed alongside producer Bizarrap during the 2023 Latin Grammy Awards Gala in Seville.

Photo By Maria Jose Lopez/Europa Press via Getty Images

How much does Shakira make from her concerts and tours?

A large part of Shakira’s wealth comes from her world tours, during which she sometimes sells out massive stadiums and arenas full of passionate fans eager to see her dance and sing live.

According to a 2020 report by Pollstar, she sold over 2.7 million tickets across 190 shows that grossed over $189 million between 2000 and 2020. This landed her the 19th spot on a list of female musicians ranked by touring revenue during that period. In 2023, Billboard reported a more modest touring revenue figure of $108.1 million across 120 shows.

In 2003, Shakira reportedly generated over $4 million from a single show on Valentine’s Day at Foro Sol in Mexico City. 15 years later, in 2018, Shakira grossed around $76.5 million from her El Dorado World Tour, according to Touring Data.

Related: RuPaul's net worth: Everything to know about the cultural icon and force behind 'Drag Race'

How much has Shakira made from her album sales?

According to a 2023 profile in Variety, Shakira has sold over 100 million records throughout her career. “Laundry Service,” the pop icon’s fifth studio album, was her most successful, selling over 13 million copies worldwide, according to TheRichest.

Exactly how much money Shakira has taken home from her album sales is unclear, but in 2008, it was widely reported that she signed a 10-year contract with LiveNation to the tune of between $70 and $100 million to release her subsequent albums and manage her tours.

Shakira and JLo co-headlined the 2020 Super Bowl Halftime Show in Florida.

Photo by Kevin Winter/Getty Images)

How much did Shakira make from her Super Bowl and World Cup performances?

Shakira co-wrote one of her biggest hits, “Waka Waka (This Time for Africa),” after FIFA selected her to create the official anthem for the 2010 World Cup in South Africa. She performed the song, along with several of her existing fan-favorite tracks, during the event’s opening ceremonies. TheThings reported in 2023 that the song generated $1.4 million in revenue, citing Popnable for the figure.

A decade later, 2020’s Superbowl halftime show featured Shakira and Jennifer Lopez as co-headliners with guest performances by Bad Bunny and J Balvin. The 14-minute performance was widely praised as a high-energy celebration of Latin music and dance, but as is typical for Super Bowl shows, neither Shakira nor JLo was compensated beyond expenses and production costs.

The exposure value that comes with performing in the Super Bowl Halftime Show, though, is significant. It is typically the most-watched television event in the U.S. each year, and in 2020, a 30-second Super Bowl ad spot cost between $5 and $6 million.

How much did Shakira make as a coach on “The Voice?”

Shakira served as a team coach on the popular singing competition program “The Voice” during the show’s fourth and sixth seasons. On the show, celebrity musicians coach up-and-coming amateurs in a team-based competition that eventually results in a single winner. In 2012, The Hollywood Reporter wrote that Shakira’s salary as a coach on “The Voice” was $12 million.

Related: John Cena's net worth: The wrestler-turned-actor's investments, businesses, and more

How does Shakira spend her money?

Shakira doesn’t just make a lot of money — she spends it, too. Like many wealthy entertainers, she’s purchased her share of luxuries, but Barranquilla’s barefoot belly dancer is also a prolific philanthropist, having donated tens of millions to charitable causes throughout her career.

Private island

Back in 2006, she teamed up with Roger Waters of Pink Floyd fame and Spanish singer Alejandro Sanz to purchase Bonds Cay, a 550-acre island in the Bahamas, which was listed for $16 million at the time.

Along with her two partners in the purchase, Shakira planned to develop the island to feature housing, hotels, and an artists’ retreat designed to host a revolving cast of artists-in-residence. This plan didn’t come to fruition, though, and as of this article’s last update, the island was once again for sale on Vladi Private Islands.

Real estate and vehicles

Like most wealthy celebs, Shakira’s portfolio of high-end playthings also features an array of luxury properties and vehicles, including a home in Barcelona, a villa in Cyprus, a Miami mansion, and a rotating cast of Mercedes-Benz vehicles.

Philanthropy and charity

Shakira doesn’t just spend her massive wealth on herself; the “Queen of Latin Music” is also a dedicated philanthropist and regularly donates portions of her earnings to the Fundación Pies Descalzos, or “Barefoot Foundation,” a charity she founded in 1997 to “improve the education and social development of children in Colombia, which has suffered decades of conflict.” The foundation focuses on providing meals for children and building and improving educational infrastructure in Shakira’s hometown of Barranquilla as well as four other Colombian communities.

In addition to her efforts with the Fundación Pies Descalzos, Shakira has made a number of other notable donations over the years. In 2007, she diverted a whopping $40 million of her wealth to help rebuild community infrastructure in Peru and Nicaragua in the wake of a devastating 8.0 magnitude earthquake. Later, during the COVID-19 pandemic in 2020, Shakira donated a large supply of N95 masks for healthcare workers and ventilators for hospital patients to her hometown of Barranquilla.

Back in 2010, the UN honored Shakira with a medal to recognize her dedication to social justice, at which time the Director General of the International Labour Organization described her as a “true ambassador for children and young people.”

On November 20, 2023 (which was supposed to be her first day of trial), Shakira reached a deal with the prosecution that resulted in a three-year suspended sentence and around $8 million in fines.

Photo by Adria Puig/Anadolu via Getty Images

Shakira’s tax fraud scandal: How much did she pay?

In 2018, prosecutors in Spain initiated a tax evasion case against Shakira, alleging she lived primarily in Spain from 2012 to 2014 and therefore failed to pay around $14.4 million in taxes to the Spanish government. Spanish law requires anyone who is “domiciled” (i.e., living primarily) in Spain for more than half of the year to pay income taxes.

During the period in question, Shakira listed the Bahamas as her primary residence but did spend some time in Spain, as she was dating Gerard Piqué, a professional footballer and Spanish citizen. The couple’s first son, Milan, was also born in Barcelona during this period. 

Shakira maintained that she spent far fewer than 183 days per year in Spain during each of the years in question. In an interview with Elle Magazine, the pop star opined that “Spanish tax authorities saw that I was dating a Spanish citizen and started to salivate. It's clear they wanted to go after that money no matter what."

Prosecutors in the case sought a fine of almost $26 million and a possible eight-year prison stint, but in November of 2023, Shakira took a deal to close the case, accepting a fine of around $8 million and a three-year suspended sentence to avoid going to trial. In reference to her decision to take the deal, Shakira stated, "While I was determined to defend my innocence in a trial that my lawyers were confident would have ruled in my favour [had the trial proceeded], I have made the decision to finally resolve this matter with the best interest of my kids at heart who do not want to see their mom sacrifice her personal well-being in this fight."

How much did the Shakira statue in Barranquilla cost?

In late 2023, a 21-foot-tall bronze likeness of Shakira was unveiled on a waterfront promenade in Barranquilla. The city’s then-mayor, Jaime Pumarejo, commissioned Colombian sculptor Yino Márquez to create the statue of the city’s treasured pop icon, along with a sculpture of the city’s coat of arms.

According to the New York Times, the two sculptures cost the city the equivalent of around $180,000. A plaque at the statue’s base reads, “A heart that composes, hips that don’t lie, an unmatched talent, a voice that moves the masses and bare feet that march for the good of children and humanity.” 

Related: Taylor Swift net worth: The most successful entertainer joins the billionaire's club

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Delta Air Lines adds a new route travelers have been asking for

The new Delta seasonal flight to the popular destination will run daily on a Boeing 767-300.

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Those who have tried to book a flight from North America to Europe in the summer of 2023 know just how high travel demand to the continent has spiked.

At 2.93 billion, visitors to the countries making up the European Union had finally reached pre-pandemic levels last year while North Americans in particular were booking trips to both large metropolises such as Paris and Milan as well as smaller cities growing increasingly popular among tourists.

Related: A popular European city is introducing the highest 'tourist tax' yet

As a result, U.S.-based airlines have been re-evaluating their networks to add more direct routes to smaller European destinations that most travelers would have previously needed to reach by train or transfer flight with a local airline.

The new flight will take place on a Boeing 767-300.

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Delta Air Lines: ‘Glad to offer customers increased choice…’

By the end of March, Delta Air Lines  (DAL)  will be restarting its route between New York’s JFK and Marco Polo International Airport in Venice as well as launching two new flights to Venice from Atlanta. One will start running this month while the other will be added during peak demand in the summer.

More Travel:

“As one of the most beautiful cities in the world, Venice is hugely popular with U.S. travelers, and our flights bring valuable tourism and trade opportunities to the city and the region as well as unrivalled opportunities for Venetians looking to explore destinations across the Americas,” Delta’s SVP for Europe Matteo Curcio said in a statement. “We’re glad to offer customers increased choice this summer with flights from New York and additional service from Atlanta.”

The JFK-Venice flight will run on a Boeing 767-300  (BA)  and have 216 seats including higher classes such as Delta One, Delta Premium Select and Delta Comfort Plus.

Delta offers these features on the new flight

Both the New York and Atlanta flights are seasonal routes that will be pulled out of service in October. Both will run daily while the first route will depart New York at 8:55 p.m. and arrive in Venice at 10:15 a.m. local time on the way there, while leaving Venice at 12:15 p.m. to arrive at JFK at 5:05 p.m. on the way back.

According to Delta, this will bring its service to 17 flights from different U.S. cities to Venice during the peak summer period. As with most Delta flights at this point, passengers in all fare classes will have access to free Wi-Fi during the flight.

Those flying in Delta’s highest class or with access through airline status or a credit card will also be able to use the new Delta lounge that is part of the airline’s $12 billion terminal renovation and is slated to open to travelers in the coming months. The space will take up more than 40,000 square feet and have an outdoor terrace.

“Delta One customers can stretch out in a lie-flat seat and enjoy premium amenities like plush bedding made from recycled plastic bottles, more beverage options, and a seasonal chef-curated four-course meal,” Delta said of the new route. “[…] All customers can enjoy a wide selection of in-flight entertainment options and stay connected with Wi-Fi and enjoy free mobile messaging.”

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The Question You Should Ask Whenever You’re Wrong

“Never bet on the end of the world. It only comes once, which is pretty long odds.” — Arthur Cashin, New York Stock Exchange Floor Manager (“Maxims…

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“Never bet on the end of the world. It only comes once, which is pretty long odds.” — Arthur Cashin, New York Stock Exchange Floor Manager (“Maxims of Wall Street,” p. 110)

Since Joe Biden gave his State of the Union (or shall we say “Disunion”) speech last week, I’ve encountered a plethora of negative comments about the future of America.

Is the American Dream Over?

“If Biden is re-elected, it will be the end of the American Dream as we know it,” said one pundit on Fox News.

The critics are out in force. Supply-side economist Steve Moore writes, “Biden is intentionally trying to dismantle the American economy with his imbecile energy, climate change, crime, border, inflation, debt and high tax policies.”

Glenn Beck, the host of Blaze TV, recently warned that America may face multiple terrorist attacks in one day, similar to 9/11, given the open borders policy of the Biden Administration.

Recently, I attended a private meeting of political leaders and pundits who thought that President Biden’s address was the most polemical, shrill and divisive talk they had ever heard.

I’ve been watching State of the Union addresses all my adult life, by both Republicans and Democrats, and in many ways they are always polemical and divisive. What was amazing to me is how “sleepy” Joe Biden performed. He must have been well rested and jacked up with some pretty incredible drugs to do as well as he did.

President Biden did say some things that were crazy, such as when he asserted that voting for former president Donald Trump is a “vote against democracy.”

Hey, wasn’t it the Democrats who want to remove Trump from the November ballot in Colorado and other states? Talk about anti-democratic! I was glad to see the Supreme Court ruled 9-0 against the Colorado decision. Let the people decide. Isn’t that what democracy is all about?

Why Then Is the Stock Market at an All-Time High? 

Kevin Roberts, the new president of the Heritage Foundation, recently declared, “The American Dream is being threatened as never before!”

If that is true, why is the stock market at or near an all-time high? What are the prophets of doom and gloom missing?

That’s the question I always ask when I’m wrong about something:

“What am I missing?”

Wall Street is a good bellwether of what is going on the country. So far, the benefits outweigh the costs. The economy is recovering from the Covid pandemic, inflation is coming down, corporate profits are strong, new technologies are being introduced and there’s a strong movement to reverse the “cancel” and “woke” culture in the United States.

We have gridlock on Capitol Hill that is keeping a lot of bad legislation from becoming law. The Supreme Court has reversed many bad decisions by the lower courts.

We Remain Fully Invested

So, all is not lost after all. In my newsletter, Forecasts & Strategies, we remain fully invested, despite occasional corrections in the market.

We are also well diversified in some “contrarian” investments such as Bitcoin and gold, both of which continue to outperform and offset any selloffs in the stock market.

By remaining positive and fully invested, we have made good money in 2024.

The American Obituary Has Been Written Many Times

The American economy has been left for dead many times, only to be resuscitated with renewed vigor. We have survived civil and world wars, the Great Depression, the inflationary 1970s, terrorist attacks and more.

As J.P. Morgan once said, “The man who is a bear on the United States will eventually go broke” (“Maxims,” p. 111).

I encourage you to read my favorite J.P. Morgan story found on pp. 218-219 in “The Maxims of Wall Street.” See www.skousenbooks.com.

American exceptionalism is alive and well. We are still the Promised Land with millions wanting to live and work here.

Solving Our Unfunded Liability Problem: Look to Canada!

One serious problem in America is the irresponsible, out-of-control deficit spending and national debt, created by both Republican and Democratic leaders over the years. The trouble is getting worse, with rising interest rates to pay the debt and the growing unfunded liabilities from Social Security and Medicare.

Robert Poole of the Reason Foundation warns:

“The Congressional Budget Office (CBO)’s latest 10-year projection is frightening. CBO projects annual federal budget deficits to increase steadily, exceeding $2.5 trillion by 2034, assuming current policies continue… The federal government is projected to borrow an additional $20 trillion over the next decade, the CBO estimates.

“One driving factor is the impact of higher interest rates on the current $34 trillion (and growing) national debt… By 2034, annual interest expense is projected to be $1.6 trillion — more than one-fourth of all federal tax revenue.

“The Penn Wharton Budget Model suggests that the United States has about 20 years to fix this debt/deficit problem — ‘after which no amount of future tax increases or spending cuts could avoid the government defaulting on its debt.’

“On August 2, 2023, Fitch Ratings downgraded the federal government’s long-term debt rating from AAA to AA+. And on November 10, 2023, Moody’s Investors Service reduced its outlook on the U.S. credit rating from ‘stable’ to ‘negative.’ Standard & Poor’s did its downgrade in 2011. These are warning shots across the ship of state’s bow.”

Sounds ominous. What to do?

Canada faced a similar problem back in the mid-1990s. Deficits were getting out of hand, and the Canadian dollar was sinking. The Conservative Party and the Liberty Party of Canada worked together and resolved to cut government spending, lay off federal workers and then went on a supply-side tax-cutting program that resulted in economic growth and deficit reduction.

What about the unfunded liability problem, which causes national bankruptcy? Again, Canada offers an incredible example of solving the issue.

Last week, Andy Puzder and Terrence Keeley wrote an op-ed in The Wall Street Journal on the success of the Canadian social security system, which has earned a 9.3% annualized return over the past 10 years (versus almost zero return in our Social Security Trust Fund). They wrote:

“The Canada Pension Plan’s superiority stems from its asset allocation. The fund invests about 57% of its assets in equities and 12% in bonds; the rest is divided among real estate, infrastructure and credit. Over the past 10 years, the Canada Pension Plan has realized a 9.3% annualized net return. Similarly to how Social Security works, Canadian citizens pay into the program and are guaranteed lifetime benefits.”

At some point, the United States will need to imitate the Canadian model. Here is a chart on the difference between the two:

In sum, there are solutions to all of our problems — if we know where to look and remain optimistic.

Sound Advice from the ‘Investment Bible’

In my home, I have a whole section of my library devoted to dozens of books written by doomsayers and Cassandras, such as “The Coming Deflation”…. “How to Prosper During the Coming Bad Years”… “Bankruptcy 1995”… “The End of Inflation” and so on.

I’ve also collected a bunch of quotes on doomsayers and Cassandras in “The Maxims of Wall Street.”

Jim Woods, my colleague at Eagle Publishing, is a big fan.

Jim states, “I’ve always felt that a collection of wisdom from the best brains in that industry has been most special to me. And on this front, there is no better ‘how to’ anthology than the one by my friend, fellow Fast Money Alert co-editor and brilliant economist, Dr. Mark Skousen. The ‘Maxims of Wall Street’ is a collection of some of the greatest wisdom ever to flow from the biggest and brightest names on Wall Street. Great investors such as Jesse Livermore, Baron Rothschild, J.P. Morgan, Benjamin Graham, Warren Buffett, Peter Lynch and John Templeton are just a sneak peek at some of the names you’ll discover in this fantastic collection. Then, there is profundity from the likes of Ben Franklin, John D. Rockefeller, Joe Kennedy, Bernard Baruch, John Maynard Keynes, Steve Forbes and numerous other luminaries too copious to mention.”

If you don’t have an autographed copy of my collection of quotes, stories and wisdom of the world’s top traders and investors, please order a copy now.

It is in its 10th edition, having sold nearly 50,000 copies. It has been endorsed by Warren Buffett, Kevin O’Leary, Jack Bogle, Kim Githler, Bert Dohmen, Richard Band and Gene Epstein in Barron’s.

I offer it cheaply to my Skousen CAFÉ readers: Only $21 for the first copy, and all additional copies are $11 each (they make a great gift to clients, friends, relatives and your favorite broker or money manager). I sign and number each one, then mail it at no extra charge if you live in the United States. If you order an entire box (32 copies), the price is only $327. As Hetty Green, the first female millionaire, once said, “When I see a good thing going cheap, I buy a lot of it!”

To order, go to www.skousenbooks.com.

You Nailed it!

Friedrich Hayek Won the Nobel Prize 50 Years Ago

“Mises and Hayek articulated and vastly enriched the principles of Adam Smith at a crucial time in this century.” — Vernon Smith (2002 Nobel prize in economics)

March 23 is the anniversary of the passing of a giant in economics — the Austrian economist Friedrich Hayek (1899-1992).

He is most famous for his bestselling book “The Road to Serfdom,” written near the end of World War II, an admittedly a pessimistic book, warning the West that its move toward socialism, fascism and communism was indeed a “road to serfdom.”

Then, when he won the Nobel prize in economics in 1974, he warned again of the dangers of “accelerating inflation,” which he said, were “brought about by policies which the majority of economists recommended and even urged governments to pursue. We have indeed at the moment little cause for pride: as a profession we have made a mess of things.”

Fortunately, we have moved away from the road to serfdom, especially after the collapse of the Berlin Wall and the Soviet socialist central planning model.

But the road to freedom has been a checkered one, and we must always be alert to losing our liberties in the name of inequality, fairness and social justice.

Last month, Tom Woods interviewed me in honor of the 50th anniversary of Hayek’s winning the Nobel prize. Watch the interview here.

Mark Skousen, Friedrich Hayek and Gary North in Austria, 1985

I had the pleasure of interviewing Hayek for three hours in the Austrian alps in 1985. He was especially happy to hear I resurrected his macroeconomic model in developing gross output (GO). See www.grossoutput.com, a measure of Hayek’s triangles.

This week, Larry Reed, former president of the Foundation for Economic Education, wrote this wonderful tribute to Hayek.

Highly recommended.

Good investing, AEIOU,

Mark Skousen

The post The Question You Should Ask Whenever You’re Wrong appeared first on Stock Investor.

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