The Bad News: Our National Debt Is Almost as Big as Our Economy
And now the bad news: our national debt is nearly as big as our economy. USA Today reports:
The Obama administration won a reprieve this week from some particularly scary economic news that had been projected to occur around Halloween.
The news: The ever-escalating national debt will hit and then surpass the size of the entire U.S. economy — an ignominious distinction previously achieved by the likes of Japan, Italy and Greece.
The reprieve: The Bureau of Economic Analysis posted third-quarter growth figures showing the economy grew at an annual rate of 2.5% through September — raising the bar to $15.2 trillion.
As a result, the gross national debt, which is what the federal government owes both to outside creditors and its own trust funds (notably Social Security), won’t reach 100% of the economy for another month or two. It’s a mere $14.9 trillion.
That delays earlier projections, based on second-quarter growth figures, that had fiscal watchdogs and others trying to pinpoint the date when the debt would surpass the size of the nation’s gross domestic product.
The website ZeroHedge was among the first to zero in on Halloween, based on an upcoming Treasury bond auction. It was joined by conservative websites such as Townhall and DailyCaller, as well as The Atlantic.
But officials at the Bipartisan Policy Center correctly noted that a growing economy will push the date into November or December. It will take that long for the debt to grow another, oh, $260 billion.
Whew, you say? Hardly.
A debt-to-GDP ratio of 98% is bad enough. It puts the U.S. closer to rarified territory — countries that owe more than they produce in a year.
(Happy Halloween..)
8 Responses to “The Bad News: Our National Debt Is Almost as Big as Our Economy”
So extend the fiscal year.
Some insist we need more real “Change,” i.e., more debt accumulated from crazy wasteful spending. That actually gives some fools “Hope.”
And some fools think if we cut spending drastically right now and put hundreds of thousands (If not a million plus.) more people out of work while cutting off unemployment benefits to the already unemployed that we can avoid a double dip recession and it doesn’t really matter what happens to those people.
And one other thing…is it really a disaster when this happens? While I consider virtually all comparisons to a household to be foolish when discussing the government a comparison that does occur to me is someone who owes $100,000 on a house and $5,000 on a house while making $75,000 a year. Are they in horrible condition? Is their situation a disaster waiting to happen? Maybe, maybe not. It depends on many factors. In this case I think the same applies to a government.
Ooops. That should have been $5,000 on a car. I am talking after lots of payments on both, BTW.
Some fools say we need to engage in huge spending (which isn’t true, especially the kind of spending that ensued in 2009 and in 2010), to stimulate the economy, while demanding much higher taxes at the same time. Fools.
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Some fools call people fools simply because they don’t agree with what they’re saying… or how they’re political outlook… or how they look at the world… Imagine that.