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For the remedial among us...
It's immediately out of date of course. The debt is now over $15 trillion but what's a trillion between friends...
For the remedial among us...
It's immediately out of date of course. The debt is now over $15 trillion but what's a trillion between friends...
It's quite obvious, this family needs to make more money.
For the remedial among us...
It's immediately out of date of course. The debt is now over $15 trillion but what's a trillion between friends...
It's quite obvious, this family needs to make more money.
For the remedial among us...
It's immediately out of date of course. The debt is now over $15 trillion but what's a trillion between friends...
It's quite obvious, this family needs to make more money.
And when more income is not possible, this family needs to spend less, wouldn't you agree?
Given that we've had widely varying marginal tax rates over the years, yet tax revenue as a percentage of GDP changes very little, it's clear that making more money is not possible. Time to sell assets and or spend less...unless you have magic beans we don't know about???
The amount of money the federal government owes to its creditors, combined with IOUs to government retirement and other programs, now tops $15.23 trillion. That's roughly equal to the value of all goods and services the U.S. economy produces in one year: $15.17 trillion as of September, the latest estimate. Private projections show the economy likely grew to about $15.3 trillion by December — a level the debt is likely to surpass this month. "The 100% mark means that your entire debt is as big as everything you're producing in your country," says Steve Bell of the Bipartisan Policy Center, which has proposed cutting nearly $6 trillion in red ink over 10 years. "Clearly, that can't continue."
Long-term projections suggest the debt will continue to grow faster than the economy, which would have to expand by at least 6% a year to keep pace. President Obama's 2012 budget shows the debt soaring past $26 trillion a decade from now. Last summer's deficit reduction deal could reduce that to $24 trillion. Many economists, such as the Brookings Institution's William Gale, say a better measure of the nation's debt is how much the government owes creditors, not counting $4.7 trillion owed to future Social Security recipients and other government beneficiaries. By that measure, the debt is roughly a third less: $10.5 trillion, or nearly 70% the size of the economy.
That is still high by historic standards. The total national debt topped the size of the economy for three years during and after World War II. It dropped to 32.5% of the economy by 1981, then began a steady climb under President Reagan, doubling over the next 12 years. The combination of recession and stimulus spending caused it to soar again under Obama. Among advanced economies, only Greece, Iceland, Ireland, Italy, Japan and Portugal have debts larger than their economies. Greece, Ireland, Portugal and Italy are at the root of the European debt crisis. The first three needed bailouts from European central banks; Italy's books are monitored by the International Monetary Fund.
The White House and Congress agreed in August to cut about $1 trillion from federal agencies over 10 years. An additional $1.2 trillion in automatic spending cuts looms beginning next year if lawmakers can't agree on a better way to do it. Economist Mark Zandi of Moody's Analytics says reaching the 100% mark shows "the grave need to address our long-term fiscal problems."
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With the national debt exceeding a staggering $15 trillion, bank savers have every right to wonder, "How is this going to affect me?" The answer: In ways you may never have imagined. It's worth taking a trip to USDebtClock.org to see just how much of the debt each American might be responsible for. For Instance, according to the Web site, each taxpayer is on the hook for more than $134,000 worth of that debt, and each citizen owes about $49,000. USDebtClock.org also shows just how fast the debt grows. For example, while keeping an eye on the site, I noticed that the national debt rose $3 million in two minutes. Here are some other key pieces of data from it:
* U.S. federal spending is higher than the U.S. federal budget deficit by more than a 3-to-1 ratio.
* U.S gross domestic product, at $15.1 trillion (the real measure of growth for the U.S. economy), is lower than the national debt, meaning our public debt obligations surpass our entire country's income.
* Total unfunded U.S. liabilities (for things such as Social Security and Medicare) stand at $117 trillion.
Perhaps a little relativity is in order. Back in 2002, the national public debt amounted to only $6 trillion. So with a $9 trillion jump in 10 years, just how is all that debt affecting your bank savings vehicles? Negatively. While hiking taxes and reducing spending are two possible ways to control the debt, there is little political will in Washington to do both (Republicans don't want to hike taxes on the wealthy and Democrats historically offer to cut spending in debt negotiations, but rarely actually do so). So, there's really only one other place to turn: the Federal Reserve. And its favorite debt-management tactic is to have the treasury print more money. That's what politicians want (especially in an election year), it's what bankers want and it's what creditors including China want (if only to ensure their debts are getting repaid). But it's not what Main Street Americans want -- or need.
By printing more money, the government triggers inflation, and that leads to a huge hit on the U.S. dollar, and by extension, the middle class, primarily in the form of higher commodity prices (such as oil and gas) and higher prices on consumer staples including beef, bread and milk. But it doesn't lead to higher bank savings rates. The Fed still has to keep rates low to encourage a "healthy" credit environment, and low rates hit bank savers right where it hurts -- in the wallet. So there you have it -- higher consumer prices but lower savings rates, all tied to the highest public debt figure in U.S. history. Unfortunately, that figure grew by $75,000 in the time to took to finish this article.
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That $6.2 trillion is more debt than was accumulated by all U.S. presidents from George Washington through Bill Clinton combined. In fact, the U.S. national debt did not eclipse the $6.195 trillion level—the amount Obama is on pace to increase it in one term—until August 19, 2002, during President George W. Bush’s second year of office.
The national debt was $10.6 trillion ($10,626,877,048,913.08) on Jan. 20, 2009, the day Obama was inaugurated. As of the close of business on Jan. 11, 2012, it was $15.2 trillion ($15,236,307,075,631.58.) In Obama’s first 1,087 days in office, the debt increased $4.6 trillion ($4,609,430,026,718.50)—or an increase of $4.24 billion ($4,240,506,004.34) per day.
At that daily rate, the debt would increase a total of $6.2 trillion ($6,195,379,272,340.74) over the entire 1,461 days of Obama’s four year term. At the close of business Aug. 19, 2002, the total national debt was $6.195 trillion.
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The updated outlook, released Tuesday, found that current Obama administration policies will result in a 50 percent increase in debt held by the public and a 40 percent increase in intra-governmental debt held in the trust funds of entitlement programs. In CBOs projections, debt held by the public is expected to increase by more than 50 percent between the end of 2011 and the end of 2022, and debt held by government accounts is expected to rise by nearly 40 percent, the CBO report found.
As a result of this rise in federal debt, CBO projects federal debt will reach $21.7 trillion by 2022. As a result, gross federal debt is projected to climb every year from 2012 to 2022, reaching $21.7 trillion in 202247 percent more than its total of $14.8 trillion at the end of 2011. These projections come under CBOs so-called baseline scenario, which assumes that all provisions of current law go into effect including the massive tax increases currently scheduled to take effect in 2013 when the Bush tax rates are set to expire.
CBOs baseline projection represents the estimated debt incurred by current policy over 10 years, reflecting the fact that government spending commitments continue over several years. Should Obama win a second term in January, he will leave office with a projected $18.4 trillion national debt an increase of $7.8 trillion in the eight years Obama will have been in office. The national debt stood at $10.6 trillion in January 2009 when Obama took office.
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For the remedial among us...
For the remedial among us...
It's immediately out of date of course. The debt is now over $15 trillion but what's a trillion between friends...
