Posted on 04/08/2016 7:12:37 AM PDT by SeekAndFind
An auditor for the Government Accountability Office told the Senate budget committee that in the next 15-25 years, the amount of public debt will exceed all the goods and services produced by the entire U.S. economy.
Without action on the debt, the auditor said the percent of debt to GDP could rise to 200% or 300%.
Gene Dodaro, the comptroller general for the Government Accountability Office, testified at the Senate Budget Committee to provide the results of its audit on the government’s financial books.
“We’re very heavily leveraged in debt,” Dodaro said. “The historical average post-World War II of how much debt we held as a percent of gross domestic product was 43 percent on average; right now we’re at 74 percent.”
Dodaro says that under current law, debt held by the public will hit a historic high.
“The highest in the United States government’s history of debt held by the public as a percent of gross domestic product was 1946, right after World War II,” he said. “We’re on mark to hit that in the next 15 to 25 years.”
Another economic projection which assumes that cost controls for Medicare don’t hold and that healthcare costs continue to increase, shows debt rising even further.
“These projections go to 200, 300 percent, and even higher of debt held by the public as a percent of gross domestic product,” said Dodaro. “We’re going to owe more than our entire economy is producing and by definition this is not sustainable.”
(Excerpt) Read more at americanthinker.com ...
Why would you expect him to operate the country any differently??
1. He’s aware that it is a problem.
2. He articulates that it is a problem.
3. He has said that he could do something about the problem.
4. He’s not a politician that was responsible for the problem.
Mr. Current Socialist/totalitarian/deceiver…STOP THAT CLOCK. REVERSE THAT CLOCK.
The entitlement programs are the main drivers of the debt. They must be reformed now.
Don't think so. Once interest rates return to historical levels, our debt servicing costs will go thru the roof.
Currently, debt is well over 100% of GDP
I do not know why but there is a huge advertisement for preventing a Puerto Rican bankruptcy, they say “no bailout”. I thought bail out meant no bankruptcy. the bs we hear
bkmk
RE: Currently, debt is well over 100% of GDP
They’re not even factoring in our UNFUNDED LIABILITIES.
Most Americans know that our nation is spending more than it is taking in (the deficit). Though many on the Left do not seem to understand (or care about) the consequences of out of control spending, most Americans do know that the nation has America has over $18 trillion in debt–or, nearly $56,000 of debt for every man, woman and child.
While $18 trillion of debt is clearly unsustainable, what is even more alarming is what we are not talking about: The fact that, in addition to the $18 trillion of debt we currently have, every man, woman, and child in America also is on the hook for nearly $400,000 in unfunded liabilities–or, over $1 million for every household.
The actual liabilities of the federal government—including Social Security, Medicare, and federal employees’ future retirement benefits—already exceed $87 trillion, or 550% of GDP.
Nothing like that figure is used in calculating the deficit. In reality, the reported budget deficit is less than one-fifth of the more accurate figure.
Why haven’t Americans heard about the titanic $87 trillion liability from these programs? One reason: The actual figures do not appear in black and white on any balance sheet.
Is it really possible that a majority of Congress and the President don’t see the cliff we are fast approaching?
Is holding on to their offices and perks really the cause of all this profligate spending?
If the Fed were to try to keep market rates persistently too high, relative to the equilibrium rate, the economy would slow (perhaps falling into recession), because capital investments (and other long-lived purchases, like consumer durables) are unattractive when the cost of borrowing set by the Fed exceeds the potential return on those investments. Similarly, if the Fed were to push market rates too low, below the levels consistent with the equilibrium rate, the economy would eventually overheat, leading to inflation—also an unsustainable and undesirable situation. The bottom line is that the state of the economy, not the Fed, ultimately determines the real rate of return attainable by savers and investors. The Fed influences market rates but not in an unconstrained way; if it seeks a healthy economy, then it must try to push market rates toward levels consistent with the underlying equilibrium rate.
the only thing I have heard from the candidates about solving the debt crisis is Trump who said the would get rid of it in eight years(?). Did say how?
Actually, the comparison of GDP with family income is quite fair:
The GDP measures only the value of goods and services for which money changes hands. The family income is likewise a measurement only of the paycheck which the breadwinner takes home.
The GDP is, in essence, the sum total of all of those paychecks. In BOTH cases, activities which improve the standard of living or boost wealth - but for which no money changes hands - are not taken into account.
2) It would require EVERYTHING produced in this country for one year to payoff the debt. How much of that does the government own or get to confiscate through taxes? THAT is the government's income relative to the debt.
Is that really so bad? If I have a gross income of $100,000 a year, I'd say that it wasn't unreasonable to have $100,000 in total debt. After all, as long as interest rates remain as low as they are (i.e., verging on negative rates), I should be able to service that debt with ease. And as long as that debt wasn't taken solely for consumption, but rather also for investment (children's college, purchase of new computer to work from home and thus save gasoline bills, etc.), it can be sensible.
I am no friend of debt (I have none, myself), but there is also no need to be irrational about it.
Regards,
Accounting tricks, repopulating money from over seas, making mexico pay for a wall, kicking out illegals, .... these are not real immediate solutions to our problem, (assuming we view the debt as a problem)
They'll have no guarantee the property will be worth what they bought it for after 30 years. They have no guarantee that they will continue to make 100k per year. And people enter into these by the thousands every day.... with no real plan to ever pay it off, manage the downside, recoup the 350k in interest they'll pay etc. I'd wager there are many here who fit that description. But if the government has debt that totals one years worth of GDP the same are freaked out about it.
It's all a matter of perspective I guess. Individual bankruptcy just seems more acceptable than the government doing it. And that's a fundamental character flaw.
I'm alone. No wife, no family. I work a job $30,000 a year to make widgets. My quota is 100 widgets per day, and widgets sell for $100. Over the course of a year, I'll make 25,000 widgets (250 working days X 100), with a total retail price of $2,500,000.
My GDP is $2,500,000, my income is still only $30,000.
With an income of $30,000, NO ONE will loan me $2,500,000 to buy a house, but that's my personal GDP, so according to you, there's no problem with me borrowing that much.
The national debt should not be compared to GDP -- it should be compared to revenue only, which is a percentage of a percentage of GDP.
No... but when you combine you and everybody else who earns a part a piece of that 2,500,000 a year... combined you’ll likely be able to borrow 4 times that.
Your description / analysis of the scenario is flawed.
YOUR "GNP" is NOT $2.5 million. Rather, it is only $30,000 per year. The "GNP" of your employer (I'm assuming, for the sake of simplicity, that you are his ONLY employee - i.e., that he gets to pocket all the rest of the fruits of your labor) is $2,470,000 per year.
That you made widgets worth millions is irrelevant to this discussion. The only thing that you actually sold was your labor - and that, apparently, had a market price of only $30,000 per year.
If you were smart, you'd open up your own factory and either find some other poor loser to work on the assembly line for you or do the work yourself and keep the "surplus value" (Marx) all to yourself.
What, you don't have the $10,000,000 it would cost to build the factory? Poor you!
Regards,
Enfunded liabilities are not debts YET. What they exclude is the bonds Treasury issued to the Social Security fund when they raided all the cash. This is 5 Trillion, putting the current debt/gdp ratio well over 100%
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