The Dividend Cafe - Tuesday - August 11, 2026

Episode Date: August 11, 2026

Brian Szytel hosts Dividend Cafe on Tuesday, August 11, describing a quiet, rudderless market session ahead of tomorrow’s CPI, with the Dow and S&P down about 0.3% and the Nasdaq down about 0.6%, the 10-year near 4.69%, and oil up about 1%. He notes better-than-expected NFIB small business optimism (99.8 vs. 97) and slightly stronger existing home sales (~4.1 million) though housing remains frozen by higher rates. Szytel then analyzes U.S. federal debt growth across eras since 2000, citing debt CAGR of 7.3% (2000–2008), 8.0% (2008–2017), 9.5% (2017–2022), and 6.6% (2022–now), arguing debt still grows faster than nominal GDP even in strong times. He also clarifies U.S. tax revenue is 17% of GDP federally but 27% including state and local when comparing to Europe’s ~50%. 00:00 Market Snapshot 00:56 Economic Data Check 01:39 Debt Growth Explained 02:53 Debt Eras Breakdown 04:03 Why It Still Matters 05:43 Tax Revenue Clarification 06:47 Wrap Up Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Welcome to the Dividend Cafe, weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. Good evening and welcome to Dividend Cafe. This is Brian Cytel with you here in your midweek host on this Tuesday, August the 11th and a rudderless day. And markets, not a lot of news. There was a couple of things out in the economic calendar that I'll go through with you. But really, I think markets are just looking at tomorrow. CPI print is just the main. attraction for this week. You did have interest rates moved down just a tiny bit, but we're still at 4.69 on the 10-year, and you had oil up about a percent. There's still a waffling of back and forth, and who knows what happens in this negotiation between some Middle Eastern countries. But there you have it. Mostly to the downside in stocks, the Dow was down roughly 0.3%, S&P was down also the same,

and the NASDAQ was down about 0.6%. It's a little more skewed to tech. This is being recorded a few minutes before the close, so those numbers are going to change a little bit. But that's what you had more or less. The economic side, you had the small business optimism survey. This is that NFIB survey that we talk about, better than expected, 99.8 versus 97. That'll be good news. That's a forward-looking indicator, but it is a survey and sentiment-driven. So keep that in mind.

And then you had existing home sales come out, slightly head of expectations at about 4.1 million. And that said, these numbers are really pretty dismal. And while prices, shockingly, are still actually up year over year, we're talking about a minuscule amount and about a third of what inflation is, call it a percent and a half. So housing remains to be stuck and still something with higher interest rates that is yet to be unfrozen. But I wanted to shift gears a little bit today and talk a little bit about the U.S. federal debt load. I've touched on this a few times, but there was a write-up that I had read earlier today,

It was talking about the incremental gain of another trillion to the debt and how long it took. Back in the first 230 years, it took that long to get up to a certain level. And then you had each year thereafter was that much quicker. In the last trillion dollars, basically every three to call it nine months, were adding another trillion to the debt. And so that dollar amount keeps growing at a faster rate. Just keep in mind that as the base grows, the incremental dollar matters less as far as a percentage gain. So I wanted to translate what they had done and put it into terms that I thought were more realistic for our readers and just say, what is the rate of change of our borrowing?

Which really means we're spending more than we're making. Is it getting worse or is it getting better? If my kids had an issue with their credit card and I was teaching them how to budget, I'd want to know if what I was doing is making any dent in it or not, if they were taking my advice. And I think we can look at it the same way with the government. There's always nuance to this. There's different periods of times.

There's wars that happen. There's recessions. There's all these different things, pandemics, financial crisis. So you've got to keep these things in context. It's not perfect. But generally speaking, if I broke down sort of four main eras in this generation, meaning the last, I'm going to call it 25 years, I'm almost 50, so we could go back farther, of course. But then you get into some real inflationary periods and some different things. And I was trying to keep it relevant and it's something that is what I think of as fresh, at least, which is really the span of my career. since 2000 and this is 2026. So if we look at those eras, you'd have a dot-com era that I would paint as 2000 to 2008. Okay. And the debt as a compounded annual growth rate, how much did the U.S. debt grow over that period of time? It compounded at 7.3% a year. Okay, that's a lot. The GFC era, this would have been 2008 to 2017. The Kager, compounded annual growth rate again, was 8%. It's a little bit higher. So we're speeding up. Then you had COVID. This was 2017 and 2022. Again, an era that I'm painting in this picture. Kager was 9.5. So each one of these different eras were ramping up, not a good sign.

And if you look at post-COVID, which is 22 to now, you'd have a Kager of only 6.6%. Now, it's not to say that we've solved any problem, because if you're growing compounding of what is now almost a $40 trillion debt load at 7%, and nominal GDP is 5%, you've got of still an unsustainable problem and most of that has to do with spending. That thing is solved. But what you can see is the delta is come down. And the two things that I'll point to a flaw in that calculus is one, the present era is a shorter period of time. Two, the present era does not include the next recession and eventually will inevitably. And then three, I would even go so far as to say the economic growth that we've seen the last three years, four years, five years,

has been really good. And so even with great economic growth, even without a recession, even without a world war or a crisis, just good old times in the economy, you're still compounding at about a percent or so or two percent over nominal GDP. So that's pretty scary because it means in the best of times, it was still the worst of times. So we're still growing the debt more than we can afford. That's the point that I wanted to make. Ultimately, these midweek dividend cafes are not meant to be novels. I could write one on the subject, and I may end up taking this topic into tomorrow's dividend cafe to extrapolate on it a little bit, but there's some food for thought on this thing here.

Good news, at face value, you have a lower delta on the kegher. Bad news is that was the best of times, and so it wasn't even zero. It was still very positive. All right. That's my fun fact for you today in some perspective. Hopefully it was received the way I wanted it to be. Question in there today was about something I had written a week ago about that U.S. tax revenue was 17% of GDP. And I said 27% and he thought it should be 17%.

Here's the reality. We're both right because 17% is the number that is the federal amount the government takes in, yes. But that's not what I was talking about. I was talking about the total tax amount, which has to include federal, state, and local, because I'm comparing it to the total tax rate in Europe. And the point was, we're half of Europe, so we tax about half as much. The total tax revenue in the U.S. is 27%. And most of those countries, it's twice that 50%. That was the point. And the point was that the fiscal gap between the two developed nations or areas is still negative. It's not like even with the double taxation,

you've solved the problem. And that's kind of scary to think about. But it's normal. You tax something to a certain degree. You ultimately will end up getting less of it as a percentage. because the growth and the size of it will be less. So keep that in mind. But that was the comment. And no, I said it correctly, but I understand where it came from. And it was an astute question to begin with. That's what I've got for you today.

I'm going to wrap it up here and let you get back into your evening. Reach out with further questions. And thank you for listening to the Dividend Cafe. The Bonson Group is a group of investment professionals registered with Hightower Securities LLC, member Finra and SIPC, and with High Tower Advisory, and SIPC, and securities are offered through High Tower Securities, Securities LLC, advisory services are offered through Hightower Advisors, LLC. This is not an offer to buy or sell securities. No investor process is free of risk. There is no guarantee that the investment process or investment opportunities referenced

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