US Debt Has Exploded

[yvv]

The shear numbers are of course increasing. But that has more to do with currency inflation than actually borrowing more money. Every major country on the planet has some debt, just like most people in this world have some financial debt. Its life.

IMO what matters is not so much the total debt a country has, but the ratio of debt to GDP. That gives you an idea of how easily a country would actually be able to pay off its debt. In the case of the US, the ratio is estimated between 104-105% which is to say its essentially a 1:1 ratio. The GDP in the United States is about equal to its debt. That's pretty common and not really all that alarming. The ratio for the entire eurozone is about ~94% with some countries well above 100%

Is debt high in the US? Yes certainly. But is it so bad that we need to stop everything and fix it now? No its not. By comparison, Greece who almost defaulted earlier this year, is somewhere north of 180%

http://www.debtclocks.eu/

Taking a snapshot at any individual moment isn't as useful as identifying the overall trend. In the past 15 years, debt:GDP ratio has risen 147% (from under 45% to over 110%).

                             GDP                        Debt (FYE)                Ratio
Dec 31, 2014   16.15 trillion                       17.82                  110.34%
Dec 31, 2013   15.76 trillion                       16.74                  106.22%
Dec 31, 2012   15.38 trillion                       16.07                  104.48%
Dec 31, 2011   15.19 trillion                       14.79                   97.37%
Dec 31, 2010   14.94 trillion                       13.56                   90.76%
Dec 31, 2009   14.54 trillion                       11.91                   81.91%
Dec 31, 2008   14.58 trillion                       10.02                   68.72%
Dec 31, 2007   14.99 trillion                        9.01                    60.11%
Dec 31, 2006   14.72 trillion                        8.51                    57.81%
Dec 31, 2005   14.37 trillion                        7.93                    55.18%
Dec 31, 2004   13.95 trillion                        7.38                    52.90%
Dec 31, 2003   13.53 trillion                        6.79                    50.18%
Dec 31, 2002   12.96 trillion                        6.23                    48.08%
Dec 31, 2001   12.71 trillion                        5.81                    45.71%
Dec 31, 2000   12.68 trillion                        5.68                    44.79%

Is a 110% ratio problematic? That single data point alone doesn't say. But in light of the trend (we were under 45% 15 years ago) and with medicare and social security expenses about to start exploding with the retiring baby boomers, yeah, it absolutely is crucial we address this now. We haven't at all over the last 15 years, despite knowing this looming crisis was coming, and we did nothing. We don't have the luxury of not acting anymore, or hoping that we can economic-growth our way out of this. We can't.

Exactly. In healthy economy, budget deficit during recession periods is compensated by proficit during expansion periods. If government has persistent deficit, exhausts reserves and continues to accumulate the debt for many years in a row, it is not a recession, it is a depression. All so called "wealthy" countries are in a state of depression right now. Their governments increase dept to hide pathological economical problems. By doing this, they are just shifting a collapse to the future. This can not last for long.

[Chronikka]

The shear numbers are of course increasing. But that has more to do with currency inflation than actually borrowing more money. Every major country on the planet has some debt, just like most people in this world have some financial debt. Its life.

IMO what matters is not so much the total debt a country has, but the ratio of debt to GDP. That gives you an idea of how easily a country would actually be able to pay off its debt. In the case of the US, the ratio is estimated between 104-105% which is to say its essentially a 1:1 ratio. The GDP in the United States is about equal to its debt. That's pretty common and not really all that alarming. The ratio for the entire eurozone is about ~94% with some countries well above 100%

Is debt high in the US? Yes certainly. But is it so bad that we need to stop everything and fix it now? No its not. By comparison, Greece who almost defaulted earlier this year, is somewhere north of 180%

http://www.debtclocks.eu/

Taking a snapshot at any individual moment isn't as useful as identifying the overall trend. In the past 15 years, debt:GDP ratio has risen 147% (from under 45% to over 110%).

                             GDP                        Debt (FYE)                Ratio
Dec 31, 2014   16.15 trillion                       17.82                  110.34%
Dec 31, 2013   15.76 trillion                       16.74                  106.22%
Dec 31, 2012   15.38 trillion                       16.07                  104.48%
Dec 31, 2011   15.19 trillion                       14.79                   97.37%
Dec 31, 2010   14.94 trillion                       13.56                   90.76%
Dec 31, 2009   14.54 trillion                       11.91                   81.91%
Dec 31, 2008   14.58 trillion                       10.02                   68.72%
Dec 31, 2007   14.99 trillion                        9.01                    60.11%
Dec 31, 2006   14.72 trillion                        8.51                    57.81%
Dec 31, 2005   14.37 trillion                        7.93                    55.18%
Dec 31, 2004   13.95 trillion                        7.38                    52.90%
Dec 31, 2003   13.53 trillion                        6.79                    50.18%
Dec 31, 2002   12.96 trillion                        6.23                    48.08%
Dec 31, 2001   12.71 trillion                        5.81                    45.71%
Dec 31, 2000   12.68 trillion                        5.68                    44.79%

Is a 110% ratio problematic? That single data point alone doesn't say. But in light of the trend (we were under 45% 15 years ago) and with medicare and social security expenses about to start exploding with the retiring baby boomers, yeah, it absolutely is crucial we address this now. We haven't at all over the last 15 years, despite knowing this looming crisis was coming, and we did nothing. We don't have the luxury of not acting anymore, or hoping that we can economic-growth our way out of this. We can't.

Exactly. In healthy economy, budget deficit during recession periods is compensated by proficit during expansion periods. If government has persistent deficit, exhausts reserves and continues to accumulate the debt for many years in a row, it is not a recession, it is a depression. All so called "wealthy" countries are in a state of depression right now. Their governments increase dept to hide pathological economical problems. By doing this, they are just shifting a collapse to the future. This can not last for long.

Pretty much the entire world is in some form of depression right now, US and Russia included. Russia's economy is collapsing, 4% GDP recession each of the last 2 quarters. The Ruble is down by nearly 50% since this time last year. Countries like the US are borrowing money to cover budget shortfalls, while countries like Russia are spending assets to do the same. Its just a difference in philosophy.

Look at those numbers you posted a little closer. From 2000 to 2007 it rose 16% in the US. In 2008 the US economy took a nose dive, and it rose 8%. Then an additional 13% in 2009, followed by 9% in 2010. So in 3 years from 2007-2010 the US increased its debt to GDP ratio at more than double the rate of the previous 7-8 years. The government was borrowing money to cover itself until things stabilized and they're able to pay it down. Now that the economy is turning around the budget is becoming a big political topic here in the US and I expect something will be done about it soon.

[johnyj]

A forever expanding money supply and forever expanding debt, never be able to payback, thus everyone have some incentive to work. Debt is similar to dream, the ultimate incentive to work

[mistanama]

The debt rises much faster than the GDP. It means those debts are not sustainable. That happened in Greece and a few other countries. The debt laden economy is not the way to go.

[jaysabi]

The shear numbers are of course increasing. But that has more to do with currency inflation than actually borrowing more money. Every major country on the planet has some debt, just like most people in this world have some financial debt. Its life.

IMO what matters is not so much the total debt a country has, but the ratio of debt to GDP. That gives you an idea of how easily a country would actually be able to pay off its debt. In the case of the US, the ratio is estimated between 104-105% which is to say its essentially a 1:1 ratio. The GDP in the United States is about equal to its debt. That's pretty common and not really all that alarming. The ratio for the entire eurozone is about ~94% with some countries well above 100%

Is debt high in the US? Yes certainly. But is it so bad that we need to stop everything and fix it now? No its not. By comparison, Greece who almost defaulted earlier this year, is somewhere north of 180%

http://www.debtclocks.eu/

Taking a snapshot at any individual moment isn't as useful as identifying the overall trend. In the past 15 years, debt:GDP ratio has risen 147% (from under 45% to over 110%).

                             GDP                        Debt (FYE)                Ratio
Dec 31, 2014   16.15 trillion                       17.82                  110.34%
Dec 31, 2013   15.76 trillion                       16.74                  106.22%
Dec 31, 2012   15.38 trillion                       16.07                  104.48%
Dec 31, 2011   15.19 trillion                       14.79                   97.37%
Dec 31, 2010   14.94 trillion                       13.56                   90.76%
Dec 31, 2009   14.54 trillion                       11.91                   81.91%
Dec 31, 2008   14.58 trillion                       10.02                   68.72%
Dec 31, 2007   14.99 trillion                        9.01                    60.11%
Dec 31, 2006   14.72 trillion                        8.51                    57.81%
Dec 31, 2005   14.37 trillion                        7.93                    55.18%
Dec 31, 2004   13.95 trillion                        7.38                    52.90%
Dec 31, 2003   13.53 trillion                        6.79                    50.18%
Dec 31, 2002   12.96 trillion                        6.23                    48.08%
Dec 31, 2001   12.71 trillion                        5.81                    45.71%
Dec 31, 2000   12.68 trillion                        5.68                    44.79%

Is a 110% ratio problematic? That single data point alone doesn't say. But in light of the trend (we were under 45% 15 years ago) and with medicare and social security expenses about to start exploding with the retiring baby boomers, yeah, it absolutely is crucial we address this now. We haven't at all over the last 15 years, despite knowing this looming crisis was coming, and we did nothing. We don't have the luxury of not acting anymore, or hoping that we can economic-growth our way out of this. We can't.

Exactly. In healthy economy, budget deficit during recession periods is compensated by proficit during expansion periods. If government has persistent deficit, exhausts reserves and continues to accumulate the debt for many years in a row, it is not a recession, it is a depression. All so called "wealthy" countries are in a state of depression right now. Their governments increase dept to hide pathological economical problems. By doing this, they are just shifting a collapse to the future. This can not last for long.

Pretty much the entire world is in some form of depression right now, US and Russia included. Russia's economy is collapsing, 4% GDP recession each of the last 2 quarters. The Ruble is down by nearly 50% since this time last year. Countries like the US are borrowing money to cover budget shortfalls, while countries like Russia are spending assets to do the same. Its just a difference in philosophy.

Look at those numbers you posted a little closer. From 2000 to 2007 it rose 16% in the US. In 2008 the US economy took a nose dive, and it rose 8%. Then an additional 13% in 2009, followed by 9% in 2010. So in 3 years from 2007-2010 the US increased its debt to GDP ratio at more than double the rate of the previous 7-8 years. The government was borrowing money to cover itself until things stabilized and they're able to pay it down. Now that the economy is turning around the budget is becoming a big political topic here in the US and I expect something will be done about it soon.

I don't share this optimism. When republicans control things, they insist on tax cuts because the deficit is small. This makes absolutely no sense. If there is any deficit at all, it means the government isn't taking in enough revenue to cover its expenses. So tax cuts are the last thing it needs. It is always promised that tax cuts will improve the economy and bring in more revenue than the cuts cost, but this has never proven out. I fully expect that whatever party is in control after the next election, the deficit spending will continue, and republicans will talk about cutting taxes, regardless of whether they are in the majority or minority position.

[zodiac3011]

Buy bitcoin and gold.
They are the best vaults to survive the fallout.
People that did not buy bitcoin or gold will turn into ghouls!

well actually gold is better I think although bitcoin can be considered gold, gold represents for the value of currency as well as has physical value so buying gold should be better than bitcoin I think

[HeroCat]

Any state debt can be paid by taxes from all country people, simply just making taxes higher. In this case US debt looks like quite high - so I think US government have already plan what to do.   

[callynyan]

They can raise taxes and implement a negative interest rate.
When they do that, commodity and basic necessity product prices will skyrocket.
You can only pull the plug of the US Dollar, there is no cure for debtus-inflatus.

[nonbody]

Any state debt can be paid by taxes from all country people, simply just making taxes higher. In this case US debt looks like quite high - so I think US government have already plan what to do.   

They cannot impose unlimited taxes to the ppl without actually stimulating the economy. Otherwise the economy will collapse! U.S. Gov has to move cautiously!

[OROBTC]

Buy bitcoin and gold.
They are the best vaults to survive the fallout.
People that did not buy bitcoin or gold will turn into ghouls!

well actually gold is better I think although bitcoin can be considered gold, gold represents for the value of currency as well as has physical value so buying gold should be better than bitcoin I think

Buy both.  

We have seen that BTC price and gold price, especially lately, do not move in tandem, therefore are both excellent candidates for diversification (my middle name).

Unless one is very wealthy or knows a lot more than I do about computer science (BTC, cryptography, programming, etc.), having 1% to, say, 3% of your net in BTC seems about right.  BTC is very volatile...

But, should BTC jump to well over $1000, then any 1% that you invest there will more than double.  If BTC goes for the moon (over $5000 price), then that little speculation will become very meaningful.

*   *   *

Holding gold (5% - 20%, again depending on circumstances and comfort level) is good too.

Gold may save your financial butt in some SHTF hurricane scenarios too...

[mistanama]

The shear numbers are of course increasing. But that has more to do with currency inflation than actually borrowing more money. Every major country on the planet has some debt, just like most people in this world have some financial debt. Its life.

IMO what matters is not so much the total debt a country has, but the ratio of debt to GDP. That gives you an idea of how easily a country would actually be able to pay off its debt. In the case of the US, the ratio is estimated between 104-105% which is to say its essentially a 1:1 ratio. The GDP in the United States is about equal to its debt. That's pretty common and not really all that alarming. The ratio for the entire eurozone is about ~94% with some countries well above 100%

Is debt high in the US? Yes certainly. But is it so bad that we need to stop everything and fix it now? No its not. By comparison, Greece who almost defaulted earlier this year, is somewhere north of 180%

http://www.debtclocks.eu/

Taking a snapshot at any individual moment isn't as useful as identifying the overall trend. In the past 15 years, debt:GDP ratio has risen 147% (from under 45% to over 110%).

                             GDP                        Debt (FYE)                Ratio
Dec 31, 2014   16.15 trillion                       17.82                  110.34%
Dec 31, 2013   15.76 trillion                       16.74                  106.22%
Dec 31, 2012   15.38 trillion                       16.07                  104.48%
Dec 31, 2011   15.19 trillion                       14.79                   97.37%
Dec 31, 2010   14.94 trillion                       13.56                   90.76%
Dec 31, 2009   14.54 trillion                       11.91                   81.91%
Dec 31, 2008   14.58 trillion                       10.02                   68.72%
Dec 31, 2007   14.99 trillion                        9.01                    60.11%
Dec 31, 2006   14.72 trillion                        8.51                    57.81%
Dec 31, 2005   14.37 trillion                        7.93                    55.18%
Dec 31, 2004   13.95 trillion                        7.38                    52.90%
Dec 31, 2003   13.53 trillion                        6.79                    50.18%
Dec 31, 2002   12.96 trillion                        6.23                    48.08%
Dec 31, 2001   12.71 trillion                        5.81                    45.71%
Dec 31, 2000   12.68 trillion                        5.68                    44.79%

Is a 110% ratio problematic? That single data point alone doesn't say. But in light of the trend (we were under 45% 15 years ago) and with medicare and social security expenses about to start exploding with the retiring baby boomers, yeah, it absolutely is crucial we address this now. We haven't at all over the last 15 years, despite knowing this looming crisis was coming, and we did nothing. We don't have the luxury of not acting anymore, or hoping that we can economic-growth our way out of this. We can't.

Exactly. In healthy economy, budget deficit during recession periods is compensated by proficit during expansion periods. If government has persistent deficit, exhausts reserves and continues to accumulate the debt for many years in a row, it is not a recession, it is a depression. All so called "wealthy" countries are in a state of depression right now. Their governments increase dept to hide pathological economical problems. By doing this, they are just shifting a collapse to the future. This can not last for long.

Pretty much the entire world is in some form of depression right now, US and Russia included. Russia's economy is collapsing, 4% GDP recession each of the last 2 quarters. The Ruble is down by nearly 50% since this time last year. Countries like the US are borrowing money to cover budget shortfalls, while countries like Russia are spending assets to do the same. Its just a difference in philosophy.

Look at those numbers you posted a little closer. From 2000 to 2007 it rose 16% in the US. In 2008 the US economy took a nose dive, and it rose 8%. Then an additional 13% in 2009, followed by 9% in 2010. So in 3 years from 2007-2010 the US increased its debt to GDP ratio at more than double the rate of the previous 7-8 years. The government was borrowing money to cover itself until things stabilized and they're able to pay it down. Now that the economy is turning around the budget is becoming a big political topic here in the US and I expect something will be done about it soon.

I don't share this optimism. When republicans control things, they insist on tax cuts because the deficit is small. This makes absolutely no sense. If there is any deficit at all, it means the government isn't taking in enough revenue to cover its expenses. So tax cuts are the last thing it needs. It is always promised that tax cuts will improve the economy and bring in more revenue than the cuts cost, but this has never proven out. I fully expect that whatever party is in control after the next election, the deficit spending will continue, and republicans will talk about cutting taxes, regardless of whether they are in the majority or minority position.

The US government should do something to cut the deficit or at least let it rise slower than the GDP rise.

[arbitrage]

Whole world's in debt!
Only those people who don't have mortgages and don't owe something to banks
have real liberty. Others are modern slaves!

[yohanip]

So we are looking at the brink of the house of cards?
anyone could predict when will that occur? i have read and watch some videos out here around 2~3 years ago predicting the fall of the majors
would this become one of those hints?

[arbitrage]

Problem is when US bubble explode every other country in the world will follow because,
dollar is the spare world carencie and is use to trade oil...
We can see many social unrests, maybe wars..That is not good!

[arbitrage]

How to overcome this problem?
Why we can't just easy overthrown dollar and use gold standard, and bitcoin as new currency.
Whole dream won't happen, because they have better plans for us..
NWO!

[btcprospecter]

There is no way this debt can ever be paid. At what point do they file for bankruptcy? I don't think replacing the financial system with anything will solve it. There is a storm coming and when it lands it's not going to be pretty.

[Drekavac]

Economic slavery?
But who asking all that money from you?

[mcplums]

Here's what I don't understand.

All new money = debt. All debt comes with interest. Therefore there is not enough money to pay back the debt.

Money supply must be constantly increased to pay back old debt. Money supply can only be increased by going further into debt.

Governments therefore MUST run deficits to keep the money supply expanding so there is enough money to pay back old debts.

So what we are seeing MUST have happened at some point- constant deficits are the only way to keep the system working.

I remember reading somewhere that during Bill Clinton's terms, while there was a government surplus, the Fed were concerned about the effect this was having on the money supply. Government deficits are REQUIRED.

This seems clear as day to me yet it is not widely acknowledged to be so. Am I wrong? Or is everyone else wrong?

[Drekavac]

https://www.youtube.com/watch?v=jqvKjsIxT_8
This is very good video watch and learn!

[mOgliE]

this should encourage more, the people to invest in bitcoin, and help growing an alternative way to the plague that was/still is our conventional money system

trusting fiat at present is more dangerous than investing in bitcoin, numerous case of money lost due to banks playing with people money

there was a case of a bank(here) suggesting to an old man to invest in a low risk investment that then is become a heavy risk one, and he lost 100k in euro, he commited suicide by hanging

Dude, people trusted banks when they explained that subprimes were good and that "variable interest rates" didn't really mean variable. You really think people will even think about another way than banks?