U.S. debt exceeds annual economic output

[jugoso]

As of Monday morning, U.S. federal debt currently sits at $15.2 trillion. According to the most up-to-date estimates from the Bureau of Economic Analysis — the U.S. equivalent to Statistics Canada — the total value of all the goods and services that the U.S. produces sits at $15.17 trillion.

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[Robbie333]

As Astro used to say on the " Jetsons" ." Wrot Ro Roeorge !"

Edited January 9, 2012 by Robbie333

[Habitat]

Plenty of individuals carry debt greater than their annual income, many times in fact, so what's significant about this ?

[kaptn k]

Solution

End the federal reserve, return to printing our own currency interest free. Stop giving foreign aid to other countries, stop all wars we are needlessly involved with, lower the salaries of everyone in the capitol (from congress to senate etc etc.) and take away their health benefits and other perks.

That would send us well on our way to financial recovery.

[jugoso]

Plenty of individuals carry debt greater than their annual income, many times in fact, so what's significant about this ?

OK....Very unsettling then. There are people that manage debt in a way that will increase their net worth. However, I don´t think this is the case in this situation. At the very least it is symbolic that things are definately moving in the wrong direction.

[+DieChecker]

Plenty of individuals carry debt greater than their annual income, many times in fact, so what's significant about this ?

Sure. If you include mortgages. Or, are you suggesting Unsecured Debt, like Credit Card debt. Because that is what the US has Unsecured Debt. Payday loans made out to itself.

There might be plenty of individuals with more debt then annual income, but I bet... 1) They make less then 20,000 a year, and 2) They are probably not happy about it.

[+DieChecker]

I think it is Moronic for people to say, "Hurrr durrr... other countries are doing it, so it must be OK." After all Ireland ran up their debt to like ten times their national GDP, and they are doing fine... wait, no... no they're not. Drastic Asterity is their future for decades.

Edited January 10, 2012 by DieChecker

[Robbie333]

OK....Very unsettling then. There are people that manage debt in a way that will increase their net worth. However, I don´t think this is the case in this situation. At the very least it is symbolic that things are definately moving in the wrong direction.

I agree.

[ninjadude]

There might be plenty of individuals with more debt then annual income, but I bet... 1) They make less then 20,000 a year, and 2) They are probably not happy about it.

1) Doubtful. 2) sure they are. It allows people to buy real property (land, cars, houses, etc) that they otherwise would be unable to afford. Essentially, the whole reason for Banks and credit in the first place. Going back now millennia.

[ninjadude]

I think it is Moronic for people to say, "Hurrr durrr... other countries are doing it, so it must be OK." After all Ireland ran up their debt to like ten times their national GDP, and they are doing fine... wait, no... no they're not. Drastic Asterity is their future for decades.

"Drastic Asterity" will only make it worse. Government needs to spend in a down economy.

[questionmark]

"Drastic Asterity" will only make it worse. Government needs to spend in a down economy.

Where I can just repeat the wise words of Albert Einstein: A idiot is somebody who keeps doing the same expecting a different outcome.

You cannot spend yourself out of the hole for decades.

[+and-then]

"Drastic Asterity" will only make it worse. Government needs to spend in a down economy.

But if the government has no money and can only print useless paper eventually inflation then hyperinflation come calling. The same conditions the decades prior to WWII.

[Mr_Snstr]

"Drastic Asterity" will only make it worse. Government needs to spend in a down economy.

I agree.

Good thing we've been making deposits at the federal reserve during our boom years, it's time we dip into our savings account to keep things moving, it's probably been growing in interest too.

wait... it doesn't work like that?

Oh ok, so we'll just use this credit card for the necessities until we get back on our feet.

wait... what do you mean we've already been using it this whole time?

[+DieChecker]

"Drastic Asterity" will only make it worse. Government needs to spend in a down economy.

And cut back in times of Plenty? And when has that ever, ever happened? Clinton? Maybe....

[+DieChecker]

1) Doubtful. 2) sure they are. It allows people to buy real property (land, cars, houses, etc) that they otherwise would be unable to afford. Essentially, the whole reason for Banks and credit in the first place. Going back now millennia.

Here is a few things I found...

•Over 90 percent of African-American families earning between $10,000 and $24,999 had credit card debt. (Source: Demos.org study, November 2007)

http://www.creditcards.com/credit-card-news/credit-card-industry-facts-personal-debt-statistics-1276.php

Unsecured Credit (aka Credit Cards) is not for the purpose of helping people, it is for the purpose of making high interest rates off people too stupid to know that they should not spend above their incomes.

I specifically excluded mortgages, as many, many people have those, and they clearly exceed just about everyone's yearly income.

But someone making 20,000 a year can easily get 20,000 to 30,000 in credit cards if they have no late payments or other knocks on their credit score. Then once they've spent it all up, they end up going bankrupt. Just like the US is heading towards. Not an actual bankruptsy, but certainly a very painful re-organization of the entire nations finances.

[Raptor Witness]

Plenty of individuals carry debt greater than their annual income, many times in fact, so what's significant about this ?

A very good point, and one I could make too. Except for one thing ... this is always predicated upon future income and credit worthiness, and the guarantee of that income to support any debt load.

What exactly will the United States produce in the future that can't be made elsewhere, far cheaper? The same goes for Europe.

The West is in decline across the board, which means the only guarantee it has right now, is its ability to print money, and that is a road to nowhere, as evidenced by the boom & bust in housing. Put simply, the Fed. was printing way too much money and it had to go someplace, where it could be absorbed. Real estate was the only place big enough. This was a last, stop gap measure, aimed at artificially creating income for the middle class.

The debt to GDP ratio alone isn't the problem, it's the future income of the average American that is the big problem, and that's in serious decline with no way of turning this trend around, except through massive inflation.

Inflation is like digging a dry well, then pouring rain water into it, because you don't want to admit what you've wasted all that time and effort digging in the wrong place. Neighbors come and see that you have water, all the while it's draining out the bottom. They continue to be your friends, however, exchanging their goods and services for your water, but the more you buy from them, the more water you remove that you've secretly added and the farther behind you get due to the wasted labor of creating this ruse, until eventually someone sees that all you're doing is putting water into a dry well. Once that happens, it won't matter how much water is put into that dry hole in the ground. Investors will go where the real water is.

[Yamato]

Plenty of individuals carry debt greater than their annual income, many times in fact, so what's significant about this ?

I presume you're referring to mortgage holders who can sell their property and pay their mortgages, which is what's insignificant about that. What's significant about this for starters is, you can't do that with this debt. This debt isn't a roof over our head. Even granting your question its mortgages, the housing crisis is far worse than you may know. People who go underwater on their mortgages wind up losing their homes so plenty of individuals you think are okay are being borrowed right out of their own houses. They need not be in so much debt either, it's just not financially wise to keep making payments on a $300k mortgage on a $125k house. A short sale yielding $75k from the nearest buyer and escaping with a $50k bill outstanding is far preferable to burning the next 5 or 6 years of their annual income dumping their dough into a mortgage that's nothing more than a money hole once other cheaper alternatives for housing are considered. Worst case scenario, declare bankruptcy, keep your income, and call it a wash on your credit in 7 years. What kind of roof have Bush and Obama bought for the American people borrowing money from Communists to promote democracy overseas? A resurgent Taliban in Afghanistan replete with record heroin exports, a resurgent Al Qaeda in Libya, a resurgent Muslim Brotherhood in Egypt, a resurgent Shiite Iraq, a resurgent Islamic Turkey, a resurgent Kurdistan, and an embittered government in Pakistan with their fingers on the nuclear button. Mission Accomplished. Only it's just fat slapped onto the thighs of America and there's no private property for the taxpayers to sell to pay for it all.