Friday, July 29, 2011

Economics:  How the U.S. Got $14 Trillion in Debt

For the meaning of this and more charts, click the link. Charting the American Debt Crisis, July 29, 2011 at NYTimes.com.


dhsloan2970 said...

Well, it is clear that Bush is the culprit here. Yet, look closer. Obama's deficit is 1.2Tr/yr, while Bush's deficit is .7625TR/yr. Obama is adding to the deficit at a 57%/year rate above the profligate Bush. No stink yet. Now, add the 2.7TR Obama wants for the next two years and you get 2.4+2.7=5.1TR, a rate for 4 years of 1.275/yr. The rate accelerates above Bush's to 67% more each year. No stink yet. By the way, when 2 years arrive, Debt to GDP ratio will be nearly 100% with 90% the breakdown point if So. Europe guides. No stink yet. Bush looks positively miserly by comparison. Go ahead, blame the Tea Party.

JJC said...

Is having debt about equal to GDP so bad? Until recently, I made $150K a year, and had a mortgage of over $450K -- so thats 3X my GDP. Or another way to look at this, the national debt divided by the population is about $42K per person. So I an in individual have chosen to take on a mortgage of $450K, but I should be outraged that the goverment has borrowed another $42K for me? Its less than 10% of what I've done -- hardly an outrage worth founding a new party over.

dhsloan2970 said...

Yes, it is bad to have debt/gpd ratio at 100%. This would exceed that of Spain, Italy, Portugal and Ireland. Iceland went broke, unable to pay their debts. They are all around 90% and are unable to internally meet obligations and so far are being supported by the Germans. All are suffering social disorder as the governments struggle to contain their spending and to find lenders for meeting their obligations. You are, evidently, a working individual. There are about 100M of the 300M that are employed. So your $42K is, for you, $128K. Of the 100 M workers, only half pay any income tax, so, assuming you are in the tax paying group, your share of the load is $256K. So in in reality you owe not $450 but $706K. If you have children, they will inherit the debt and if they are successful and earn enough to pay taxes, they will shoulder nearly $1/4Million each of national debt that they didn't create. This is the height of irresponsibility to the upcoming generations of our country.