Debt 100% of GDP first time since WWII

We expect that now the debt ceiling is debate is over we can see fall out from the drama. The first was a report today that after the ceiling was raised the US debt shot up $238 billion to reach 100 percent of gross domestic project. Just like when a 21 year old get their first credit card the envelope has not hit the floor and they swipe it. The Treasury was borrowing immediately after President Barack Obama signed into law an increase in the debt ceiling as the country’s spending commitments reached a breaking point and it threatened to default on its debt. In case you have been under a rock the new borrowing took total public debt to $14.58 trillion, over end-2010 GDP of $14.53 trillion, and putting it in a league with highly indebted countries like Italy and Belgium. When economists speak of Italy and Belgium and default they talk only as not if but when. In the US the official limit was hiked $400 billion and will be increased in stages over the next 18 months. The facts show that the last time US debt topped the size of its annual economy was in 1947 just after World War II. It was only thirty years ago in 1981 it had fallen to just 32.5 percent.

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