Debt Super Cyucle: U.S. Debt to Exceed GDP in 2012

[boedicca]

Get ready for Japanese style malaise. Japan has had two lost decades economically due to the debt super cycle policies which caused their debt to exceed GDP. The interest expense of such debt levels drag down an economy, resulting in lower growth (and job creation).

Obamanomics = EPIC FAIL.

President Barack Obama is poised to increase the U.S. debt to a level that exceeds the value of the nation’s annual economic output, a step toward what Bill Gross called a “debt super cycle.”

The CHART OF THE DAY tracks U.S. gross domestic product and the government’s total debt, which rose past $13 trillion for the first time this month. The amount owed will surpass GDP in 2012, based on forecasts by the International Monetary Fund. The lower panel shows U.S. annual GDP growth as tracked by the IMF, which projects the world’s largest economy to expand at a slower pace than the 3.2 percent average during the past five decades.

“Over the long term, interest rates on government debt will likely have to rise to attract investors,” said Hiroki Shimazu, a market economist in Tokyo at Nikko Cordial Securities Inc., a unit of Japan’s third-largest publicly traded bank. “That will be a big burden on the government and the people.” ...

U.S.?s $13 Trillion Debt Poised to Overtake GDP: Chart of Day - Bloomberg.com

 

[william the wie]

The increasing radicalization of both political parties and their increasing regionalization is leading to separatism. I would be willing to defend a shift in political spectrum that destroys one or both current major parties; Russian style fission; or organic fusion with other countries but something major is going to give by 2020.

 

[The Rabbi]

Greece here we come.
If Europe has taught anything, it is that Keynesian tax n spend does not work. Bernanke needs to resign.

 

[uscitizen]

Finally.