In the words of both former US Comptroller General, David Walker, and former Fed Chairman, Alan Greenspan, "The United States is currently on an unsustainable path."
This is what they were talking about; our current economic and fiscal reality:
Projected 2009 GDP = $14 trillion (caveat: GDP decreased at an annual rate of 6.1 percent in the first quarter of 2009, after declining by 6.3 in the fourth quarter of 2008)
In April of 2008, the US National Debt was $9.4 trillion
In April of 2009, the US National Debt was $11.25 trillion (that's 80% of GDP, the highest percentage since Harry Truman was president)
2009 budget deficit = $1.84 trillion
2010 federal budget = $3.4 trillion, 1/3 of which is financed
2010 budget deficit = $1.26 trillion
Existing 2009 budget deficit, plus next year's deficit ($1.84 trillion + $1.26 trillion) = $3.10 trillion
Based on CBO estimates, the national debt will exceed $14 trillion in 2012
But, based on some rather simple math, this will actually happen next year ($11.25 trillion + $3.10 trillion = $14.35 trillion). That would put the National Debt at 100% of GDP for the first time since WWII.
In Fiscal Year 2008, the U. S. Government spent $451 Billion of our money on interest payments to the holders of the National Debt. This year, with the debt even higher, the government will spend even more than $451 billion servicing our debt.
28% of our total debt (and more than half our publicly held debt) is held by foreigners or foreign governments, the highest percentage since the 19th Century
The interest expense paid on the National Debt is the fourth largest expense in the federal budget. Only Medicare-Medicaid ($739b), Social Security ($700b), and Defense ($657b) are higher.
Interest payments on the debt do not benefit taxpayers in any way. We get nothing in return.
We are simply exchanging our economic crisis for a debt crisis.
Does any of this seem sustainable to you?
recommend
Facebook
Twitter
bookmark 
print
Comments: 8
Great to hear from you Sean. Long time.
On Social Security and Medicare programs, if we all agreed to pay 1% more (from 12.1% to 13.1%) in Social Security tax and increase the cap currently set at $102,000 to $200,000, plus reduce the FURURE Social Security Distribution by 1% each year, and do the same for Medicare, we can very quickly solve future entitlement money problem with very little pain.
The current reduction in tax revenue is killing payments on the debt. We are actually having to borrow to pay the debt now and this is not going to end anytime even remotely soon as the budget grows by leaps and bounds. It's like how many people used their credit cards to make payments on other cards/forms of debt, it can't be sustained. Never mind the money supply growth that cannot do anything but trigger a wave of inflation.
Jeff, you are using unemployment figures that are understated to say the least. Depending on the economist, those may be understated by 3-4% if it includes those who have simply given up on finding employment.
Regardless, all commenting here at least agree we are in serious trouble. I just wish another 100 million or so other people did too and then maybe something would get done. There is absolutely no political will in the Dem party and only a bit more in the Repubs. Neither party has a lick of credibility on the subject after decades of spending like madmen....
More research goes into pizza dough than NASA
The US grows and exports a variety of wheat red white hard soft and durum winter and spring. More research goes into the wheat harvest than goes into the space program. The large pizza manufactures have their own variety of wheat for each type of crust.
The structural economic drag caused by drought is more than compensated for by the gain in productive acreage during wet half of the cycle. The ability of mega farming conglomerates to automatically process and preserve food stuff through the increasing severity of future drought cycles will be a key factor between the success or failure of subsistence farming cultures.
As free trade agreements boost the global per capita income The demand for U.S. Agricultural products especially soft white wheat is increasing. The Trade Deficit is the measured is US$, but refers to the difference between your apples I ship and my oranges I ship with out respect to the effect of shipping to the equation as FOB shipping point.
Much of the economy is measured in terms of non farm production. The simple fact is farming and shipping agricultural goods is a primary U.S. industries. Much of which is taken out of the GDP equation.
The best thing going for the U.S. right now is the retooling to produce a small fuel injected turbo charged diesel engine. Getting the bio-fuel industry growing will not only grow GDP, but it will reduce the trade deficit.
"A nod is as good as a wink to a blind horse" Faces 1971
This is why the econic recovery we might see under Obama is artificial. He (along with Congress, Bush, and many others before) have been saving the bad times for later. The problem is that later is just around the corner now.
I wish more Americans were aware of the looming debt crisis.