SHI 01.15.2025 – Beefy Economics
January 15, 2025
This may surprise you:
The United States is 2.27 billion acres in size. 640 million, or 28% of that total, are owned by the United States government.
“
America owns about a quarter of America.“
Hard to fathom, right? But true. At least it was true when the Congressional Research Service last updated their “Federal Land Ownership” report back in 2017. If you’d like to read the entire 29 page report, you can do so by clicking here.
Federal land management falls to five (5) agencies: The ‘BLM‘, the ‘Forest Service‘, the ‘Fish and Wildlife Service‘, the ‘National Park Service‘, and the ‘Department of the Defense‘. Let me float an idea by you — a real “win-win” in my book. What do you say we solve the current American housing problem using federal lands? How could anyone object to such a great idea, right?
Welcome to this week’s Steak House Index update.
Why You Should Care: The US economy and US dollar are the bedrock of the world’s economy.
But is the US economy expanding or contracting?
Expanding … according the ‘advanced’ reading just released by the BEA, Q3, 2024 GDP grew — in ‘current-dollar‘ terms — at the annual rate of 4.7%.
The ‘real’ growth rate — the number most often touted in the mainstream media — was 2.8%. In current dollar terms, US annual economic output rose to $29.35 trillion.
According to the IMF, the world’s annual GDP expanded to over $105 trillion in 2023. Further, IMF expects global GDP to reach almost $135 trillion by 2028 — an increase of more than 28% in just 5 years.
America’s GDP remains around 25% of all global GDP. Collectively, the US, the European Common Market, and China generate about 70% of the global economic output. These are the 3 big, global players. They bear close scrutiny.
The objective of this blog is singular.
It attempts to predict the direction of our GDP ahead of official economic releases. Historically, ‘personal consumption expenditures,’ or PCE, has been the largest component of US GDP growth — typically about 2/3 of all GDP growth. In fact, the majority of all GDP increases (or declines) usually results from (increases or decreases in) consumer spending. Consumer spending is clearly a critical financial metric. In all likelihood, the most important financial metric. The Steak House Index focuses right here … on the “consumer spending” metric. I intend the SHI10 is to be predictive, anticipating where the economy is going – not where it’s been.
Taking action: Keep up with this weekly BLOG update. Not only will we cover the SHI and SHI10, but we’ll explore “fun” items of economic importance. Hopefully you find the discussion fun, too.
If the SHI10 index moves appreciably -– either showing massive improvement or significant declines –- indicating growing economic strength or a potential recession, we’ll discuss possible actions at that time.
The Blog:
Imagine this: The vertical face of ‘Half Dome’ in Yosemite covered with inexpensive, affordable condos. What a sight!
No? This isn’t working for you?
No worries, it doesn’t work for me either. No, let’s leave the National Parks alone. They are amazing, timeless American jewels in my humble opinion. And while Camp Pendleton is another jewel, located along some of the best ocean-front coast line in the world, where home sales could probably payoff the entire US national debt, I say “hands off” to land owned and used by the DoD.
OK, let’s get serious here. Take a look at the chart below showing states with the largest concentrations of US-owned land:

I don’t know how this chart strikes you, but frankly I was amazed by these numbers. I had no idea such large swaths of the West were US government owned. Almost 46% of California’s total land area is owned by the United States? And over 61% of Idaho is owned by the US? Amazing.
No, I don’t think Alaska is a good home-building location. Too cold. So let’s scratch Alaska from the list. But Arizona, CA, Colorado and Idaho? Sure! Avoiding DoD and National Park lands, there must be other federal lands that we feel less attached to. I mean, wow, the US government owns a TON of land out here in the West.
Do you see all that blue/gray land on the image below? That’s land overseen by the ‘Bureau of Land Management’ or BLM.

It turns out the BLM oversees more than 258 million acres owned by the United States! That’s a whole lot of acres. I have to believe we could trim away a few thousand here or there, build a million or so “affordable” housing units and make a meaningful dent in the US housing shortage. No one would even notice, right?
It’s a thought. 🙂
In a prior blog, I opined that housing — or perhaps more precisely, the lack of housing — was likely one of the many catalysts fueling the “Trump Bump” in the popular election. There simply is not enough of the stuff across the US. When asked, people across the country all pretty much said the same thing: It costs too much and there isn’t enough of it. That’s why I’m somewhat serious to suggest we use some BLM federal lands to help solve the problem. More on this below.
On the other hand, the housing situation is improving, somewhat organically. Let’s take a look at some current data.

The period from 2000 to 2006 was definitely boom-time for single-family homes (SFR) — the RED ‘bar-lines’ above.
Beginning in 2007, however, SFR construction fell off a cliff. By 2010, SFR construction was a mere shadow of its prior self. But since that time, year after year, the US made gains delivering more SFRs each year. And the same has been true with multi-family, or apartment homes — shown in the BLUE bars above. The best news yet: 2024 saw more than 1 million single-family home completions, up slightly from 2023. The BIG gain was in multifamily, or apartment, construction: More than 590,000 apartments were completed in 2024, up 35% from 2023. Further, this is the largest number of apartment completions since 1974!
Theses are promising developments for sure. However, as housing is one of the most interest rate-sensitive of all economic activities, interest rate levels have an oversized impact on this market segment. Because a housing project can take 3-4 years from conception to completion, it’s likely the homes delivered in 2024 were from housing projects started in 2020 or 2021. Which means we would expect housing starts to fall when the FED began raising interest rates in early 2022. And this is precisely what happened: New ‘privately-owned’ housing starts declined from an “annualized rate” of 1.83 million down to about 1.4 million within 3 months. They’ve bounced up and down around that level ever since.
And therein lies the challenge in housing. Everyone knows, and everyone agrees, that the US needs more of this stuff. But every time the FED raises interest rates to counter an inflation spike, the new home market pays the price. Starts decline. Inventory declines. Causing prices to rise. We seem trapped in this new paradigm.
So let’s fix it at the national level. I suggest a “public/private” home-building joint venture between the BLM and the nation’s largest homebuilders. The BLM contributes the land, the Department of HUD provides below market, low-rate financing, and the home builders construct and deliver the completed home communities designed with a balance between “market” and affordable homes. Yes, this is a very imprecise formula. And it’s filled with potential for bad outcomes and failure. But it could work … and it’s high time we gave it a try. Artificial intelligence isn’t the only thing that could use a federal government push in the right direction. The US government can help a little here, too.
The bottom line: Use of some federal lands could be a resource to help solve the long simmering American housing shortage. There seems to be plenty of it. Sure, it may not be perfectly located, but there are ways to work around that problem. Regardless, this is a BIG problem and perhaps even worse, it’s a very slow moving, very complex problem. That’s a hard problem to solve. Let’s bring in the big guns.
To the steakhouses?

There is marked improvement in reservation demand this week. Our expensive eateries across the country are in high demand. In fact, only one of the 10 SHI markets saw reservation demand decline this week. And it’s worth noting that reservation demand in our San Francisco steak houses have been in the black for two weeks running. This is quite a change from 2024. Take a look:

Our ‘Steak House Index‘ theory is founded on the belief that reservation demand levels in our opulent eateries is a barometer for overall economic activity. This week, once again, that relationship appears strong.
I’ll finish with a brief comment on inflation. The chart below, courtesy of the Wall Street Journal, is interesting. When asked, more than 2-dozen economic experts shared their forecast for future CPI in the middle of 2025. With few exceptions, these experts believe consumer inflation is heating up. Most experts now expect inflation to be about 1/2% higher than they did 6-months ago. Right or wrong, their opinions are interesting … and they tend to move financial markets.

Of course, this is just a forecast. Experts have been wrong before. And remember that infamous, and extremely funny, “economist joke” they tell at all the conventions: “If you lined up all economists in the world end-to-end, you would never reach a conclusion.”
Right. I never found that joke to be very funny either. 🙂
-=: Terry Liebman:=-