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January 11, 2012 - 05:18 PM God's prophets warned us about this happening!!.. US National Debt Now Bigger Than the Economy The U.S. national debt, now more than $15.23 trillion, has surpassed the amount of economic output in a single year. The gross domestic product (GDP), the value of all goods and services produced in the United States, for all of 2010 was likely around $15.3 trillion. The last time the national debt surpassed the GDP was for three years during and after World War II. Diane Lim Rogers, chief economist for The Concord Coalition, a non-partisan organization advocating responsible fiscal policy, said, in an email to The Christian Post, that the milestone should be understood in proper context. The important numbers to look at are the net debt and the growth of that debt relative to GDP. The $15.23 trillion is gross debt, which is the amount owed to investors plus the amount the government owes itself, due to the Social Security trust fund. The net debt, or debt held by the public, is of more economic significance, Rogers explained. The net debt is about $10.5 trillion, which is about 65 to 70 percent of GDP. Additionally, the size of the national debt is a “huge concern,” Rogers said, because of how fast the debt is growing relative to GDP. As large as the national debt is, if the economy was growing faster than the rate at which the government is borrowing money, the debt would not be much of a concern. Unfortunately, this is not the case. “The federal fiscal outlook is on an economically unsustainable path,” Rogers explained, because, deficits as a percent of GDP have been much larger in recent years than the growth rate of the economy. Deficits as a percent of GDP have been around eight to 10 percent in recent years while the economy has grown around two percent a year. (In the past, economic growth averaged around three percent a year.).................... Love, Red from NM |