United States Debt Higher Than United States GDP

Everyone knows that the problem America faces is a spending problem.  We simply are spending more money than we have a hope of bringing in.  Since the end of WWII, the United States has remained steady with tax receipts coming in around 18% of GDP.  More in the good years, less during recessionary periods.  The whole of that time our spending has been a little more.  Not now.  Now our spending has dramatically increased.

The result is a debt to GDP level that is unprecedented:

The nation’s debt has reached a symbolic milestone. With gross domestic product of roughly $15 trillion and total debt of $15.23 trillion, our total debt is now bigger than our economy, as USA Today noted Monday.

What’s more, the Obama administration’s projections put our debt at more than $23 trillion by 2020, well in excess of the projected $22.5 trillion GDP.

Indeed, this is bad news.  But how bad?  Let’s look at other nations in the debt club that we find ourselves in:

Zimbabwe 233.2
Japan 199.7
Saint Kitts and Nevis 185
Greece 142.7
Lebanon 133.8
Iceland 126.3
Jamaica 126.2
Italy 119.1
Singapore 105.8
Barbados 102.1
Belgium 100.7

Not very good company at all.  And it’s only going to get worse.

Some commentators are claiming that we are going to end up like Greece.  Our debt and our #Occupiers seem to indicate that we very well could.

5 responses to “United States Debt Higher Than United States GDP

  1. Japan has twice our debt to GDP ratio, yet low unemployment and still a very strong work ethic. The US won’t turn out like Greece for the same reason we won’t turn out like Japan – our culture is different. The only way to grow us out of debt is to reconstruct the middle class and stop the expansion of wealth at the very top. Here’s why: the middle class create demand which drives the economy. They are the job creators, without them, jobs go away. The wealthy are NOT the job creators. The recent bubbles – dot com and housing — show why. When wealth accumulates to the wealthiest because of taxes that are too low, they don’t go out and create jobs. They try to find the easiest way to gain more wealth. Dot coms first, real estate later. These bubbles helped create a huge debt load. Private debt has grown faster than government debt — our real debt to GDP ratio is 400%, much higher than Japan’s because of private and corporate debt. Instead of creating jobs to help the economy, more wealth concentrated at the top meant bubbles that harmed the economy.

    So we need to recognize that middle class demand and growing affluence among the poor have historically always been what drives economic growth. We get that going again (and it would require some higher taxes on the wealthy — they can afford it, they’ve done much better in the last thirty years relative to the rest of the population ) then we’ll start a slow path to paying down the debt. We went from 120% debt to GDP at the end of WWII to only 30% by 1980. Alas, the 80s saw us embrace “borrow and spend” which started this mess (government debt to GDP went from 30% in 1980 to 60% in 1990), creating a false illusion of economic prosperity in the 80s and 90s.

    • We went from 120% debt to GDP at the end of WWII to only 30% by 1980.

      We did this by slashing spending. On the military, yes, but on many different programs.

      Spending, and the reduction of said spending, is the key.

  2. Scott,

    With all due respect, you are just wrong . Do you really believe the top 1 % created the dotcom bubble and the housing bubble ? It was more like those in the middle for the housing bubble and the upper middle with dot com bubble who wanted a short cut to being in the 1 % .

    You can raise taxes on the rich and their money will go into tax shelters instead of job producing industries .

    You on the left, and you and Obama ‘ are ‘ on the left and not the middle, you have succeeded in changing the narrative from Obama’s failed policies of a centrally planned socialist economy to blaming unequal distribution of wealth for the bad economy .

    You and Obama are to be congratulated . Obama’s record simply can’t be defended, so brilliantly you do not even try . You have shifted the argument so that we on the right are stuck defending the evil rich, instead of us attacking Obama not meeting his own expectations. 4 million missing green jobs, unemployment not going above 8 %. Those are Obama’s benchmarks and we are not talking about them.

    Again, congratulations in beating us in the public relations game . I would not have believed that the Democrats could shift the blame from themselves, but facts are facts .

    • Do you really believe the top 1 % created the dotcom bubble and the housing bubble ?

      That’s the narrative, yes. The rich, specifically Wall Street, created the bubble. Try blaming government policy and watch the fireworks.

  3. Pino,

    The battlefield has got to be shifted back to President Obama’s record. The Democrats shifted it to class warfare and the 1 %. It has to be shifted back to what Obama promised and what he delivered .

    The deficits, the bureaucratic rules, the energy policy of punishing conventional sources and subsidizing worthless companies like Solyndra . That is why unemployment is high, not the 1 %.

    Obama has to be hammered on these facts. We have to get off of defense.

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