FORECASTS & TRENDS E-LETTER
by Gary D. Halbert
April 19, 2022

IN THIS ISSUE:

1. US Gun Sales Still Soaring, Question Is Why?

2. Gun Purchases Second Highest On Record in 2021

3. Sadly, Over Half of Firearm Deaths Are Suicides

4. US Debt $30.4 Trillion, Debt Held By Public $23.2 Trillion

Overview – US Gun Sales Still Soaring, Question Is Why?

US gun sales exploded in 2019 and 2020 as you can see in the chart below, including the largest numbers of first-time buyers ever recorded. While sales dropped off a little in 2021, it was still the second largest year for gun sales in history. We’ll talk about why this is happening today.

There are several theories as to why gun sales exploded in the last few years, but one of the leading explanations is that widespread efforts to defund the police made many Americans fear for their own safety, and they felt it necessary to buy guns and have them in their homes for personal protection. Whatever the reasons, the demand for guns remains historically high.

Following that discussion, I’ll update you on our ballooning national debt which is now above $30 trillion. We’ll also look at how much of that debt is held by the public versus the government. Hint: the public now owns over three quarters of our national debt.

Let’s get started.

Gun Purchases Second Highest On Record in 2021

Americans bought an estimated 19 million firearms last year. That’s down just over 12% from the record high near 22 million in 2020, but 2021 was still the industry’s second-busiest year on record – as safety, public health concerns and politics continue to drive interest in owning guns.

Gun sales soared to unprecedented levels in 2020, exceeding the previous year by nearly 64%, according to Small Arms Analytics and Forecasting. In addition to defunding the police, many observers think politics and Covid-19 are key reasons for this surge.  As the pandemic – and the economic devastation it wrought – fueled safety worries in early 2020, gun purchases exploded. Sales remained high all year, especially as the presidential election approached, with fears Joe Biden would implement stricter gun control measures.

Increasingly, Americans have concluded that their safety is ultimately their own responsibility. Those are the primary driving forces for increased gun sales and also increased support for NRA-backed “constitutional carry” legislation making it legal for law-abiding gun owners to carry for self-defense without a permit from the state.

Last year, Americans’ worries about Covid-19 partially waned as President Joe Biden’s calls for more stringent gun laws largely went unanswered by lawmakers, possibly tempering interest in firearms. Regardless, the National Shooting Sports Foundation estimates US firearm stores sold guns to around 3.2 million first-time purchasers in the first half of 2021, confirming demand hasn’t faded yet.

Unfortunately, US gun deaths also spiked during the pandemic. Some 20,726 people died from homicides, unintentional deaths and other types of gun violence – not including suicides – in 2021, and 19,486 died in 2020, up from 15,468 in 2019, according to the Gun Violence Archive. The country also recorded 693 mass shootings with four or more injuries last year, a jump from 611 in 2020 and 417 in 2019.

Some advocates for stricter gun control fear the rapid pandemic-era rise in gun sales has boosted the risk of gun violence and injuries, especially among first-time owners who aren’t accustomed to owning a firearm. Yet gun control opponents argue most crimes are committed using illegal or second-hand guns, not new firearms that were subjected to an FBI background check. They have a point.

Sadly, Over Half of Firearm Deaths Are Suicides

In 2020, the most recent year for which complete data is available, 45,222 people died from gun-related injuries in the US, according to the CDC. That figure includes gun murders and gun suicides, along with other less common types of gun-related deaths tracked by the CDC. 

In 2020, the number of firearms-involved deaths were 55% suicides. Though they tend to get less public attention than gun-related murders, suicides have long accounted for the majority of US gun deaths. But they have spiked even more in recent years, especially since the pandemic. The spike in suicides came amid coronavirus pandemic lockdowns that left millions of people lonely and cut off.

Suicide rates increased 30% between 2000 and 2018 but declined modestly in 2019 and 2020. Suicide is a leading cause of death in the United States, with 45,979 deaths in 2020. This is about one death every 11 minutes. The number of people who think about or attempt suicide is even higher. In 2020, an estimated 12.2 million American adults seriously thought about suicide, 3.2 million planned a suicide attempt and 1.2 million actually attempted suicide.

Suicide and suicide attempts cause serious emotional, physical, and economic impacts. People who attempt suicide and survive may experience serious injuries that can have long-term effects on their health. They may also experience depression and other mental health concerns. The good news is that more than 90% of people who attempt suicide and survive never go on to die by suicide.

Suicide and suicide attempts affect the health and well-being of friends, loved ones, co-workers, and the community. When people die by suicide, their surviving family and friends often experience shock, anger, guilt, symptoms of depression or anxiety and may even experience thoughts of suicide themselves.

The financial toll of suicide on society is also costly. In 2019, suicide and nonfatal self-harm cost the nation nearly $490 billion in medical costs, work loss costs and quality of life costs.

The question is whether the increase in gun sales in recent years is a contributing factor in the suicide rate. This is a highly debated question. However, the fact that the suicide rate declined in 2019 and 2020, when gun sales were skyrocketing, suggests the answer is NO. Gun control advocates obviously disagree, but facts are facts.

This debate is far from over, and I don't pretend to have all the answers. We'll be talking about this for years and years to come. I’ll leave it there for today.

US National Debt $30.4 Trillion, Debt Held By Public $23.2 Trillion

The US national debt has swelled to a staggering $30.390 trillion, the largest debt ever accumulated by any country in world history. US Gross Domestic Product was $24.002 trillion last year, so our debt-to-GDP ratio is now at 125.6%, also the highest ever recorded.

No one seems to care, not the general public and certainly not the politicians in Washington, including President Biden who just proposed the largest federal budget in history. The politicos in Washington believe there is no limit on how much debt we can take on. Are they correct? So far, it would seem they are. But I have my doubts.

Of the $30.4 trillion in total national debt, a record $23.7 trillion or 76% is “debt held by the public,” while $6.7 trillion is “intragovernmental debt.”

Debt held by the public includes all outstanding debt not owed by the government, including debt held by individuals, corporations, state and local governments, banks, foreign individuals, foreign governments, and GAS deposit funds, such as the Thrift Savings Plan. In short, debt held by the public includes everyone but the US federal government.

Intragovernmental debt includes debt held by the federal government, including Government Account Series (GAS) bonds held by government trust funds, revolving funds and other special government funds.

Together, these two debts make up our total national debt of $30.390 trillion. There are many who believe the intragovernmental debt of $6.7 trillion should not count toward the national debt. Why? They argue this is debt we owe ourselves and thus shouldn’t be included in the national debt. They’ve made this argument for years.

I totally disagree! The government debt owed by federal agencies to one another is no different than debt held by the public. It still has to be repaid, or rolled over, periodically. It still consists of government issued Treasury securities, just like the ones issued to public debt holders. Any way you cut it, this debt is still an obligation of the federal government.

The mainstream media likes to ignore the intragovernmental debt when they refer to our national debt. They often refer to our national debt as only the debt held by the public. They assume most people don’t know what our total debt is, and to a large extent they are correct. How many Americans know our national debt is $30.4 trillion? Not that many.

This is why I repeat the above discussion in these pages every few years. While most of my clients and readers are well aware of our true national debt, this reminder is helpful for newer readers.

As another reminder to everyone, I always welcome your comments and suggestions on everything I write. I greatly appreciate your feedback whether it’s positive or negative. It’s great to hear from you, so don’t hesitate to drop me a note. I read every one!

Best personal regards,

Gary D. Halbert

SPECIAL ARTICLES

Gun Sales Continued to Surge in 2021

Gross Federal Debt Versus Debt Held by the Public

Gary's Between the Lines column: US Inflation Spikes To 40-Year High In March

 

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