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US Debt Now Larger Than US Economy

A front page story in Monday’s USA Today (above the fold) reported, “The soaring national debt has reached a symbolic tipping point: It's now as big as the entire U.S. economy.” The news item went on to say:

“The amount of money the federal government owes to its creditors, combined with IOUs to government retirement and other programs, now tops $15.23 trillion.

“That's roughly equal to the value of all goods and services the U.S. economy produces in one year: $15.17 trillion as of September, the latest estimate. Private projections show the economy likely grew to about $15.3 trillion by December — a level the debt is likely to surpass this month.

"The 100% mark means that your entire debt is as big as everything you're producing in your country," says Steve Bell of the Bipartisan Policy Center, which has proposed cutting nearly $6 trillion in red ink over 10 years. "Clearly, that can't continue."

"Long-term projections suggest the debt will continue to grow faster than the economy, which would have to expand by at least 6% a year to keep pace.”

The following chart is from the USA Today article:


In an op-ed posted at the Independent Women’s Forum, Nicole Kurokawa Neily points out:

“With this milestone, the U.S. joins a small group of nations whose debt exceeds their GDP: Europe’s PIIG nations (Portugal, Italy, Ireland, and Greece) as well as Iceland and Japan. What… illustrious company.

“As Rep. Jim Jordan, chairman of the Republican Study Committee, soberly assessed, “Having a national debt larger than our economy basically means two things. The debt is too big, and our economy is too small.”

“With GDP growth slightly less than 2 percent, we’re a long way from where we need to be on that front . . . .”

At the Heritage Foundation’s blog, The Foundry, Josh Shepherd discusses “the reality of America’s national debt,” and points to two informative Heritage resources: first, their budget reform plan, Saving the American Dream; and the documentary film/DVD, I Want Your Money ($).

Other Resources: U.S. National Debt Clock is here. U.S. National Debt Clock (real time) is here. Historical charts and tables of U.S. debt by year is here. And here is the link to the Bipartisan Policy Center, founded by, among others, former U.S. senators Bob Dole and Tom Daschle. In addition, the U.S. Treasury Department's Bureau of Public Debt provides this webpage where you can "find the total public debt on a specific day or days.

UPDATE (1/13/12): At the Wall Street Journal blog yesterday (HT Big Government), Washington Wire, Damian Paletta writes:

"The Treasury Department has begun maneuvers to avoid hitting the debt ceiling, as the Obama administration waits for Congress to return from the holiday break before it can raise the federal borrowing limit.

"The U.S. government was just a hair below the $15.194 trillion debt ceiling on Tuesday, $25 million shy of the limit Congress set last summer. President Barack Obama sent a letter to congressional leaders Thursday, saying the U.S. debt was within $100 million of the ceiling “and that further borrowing is required to meet existing commitments.”

"Raising the debt ceiling another $1.2 trillion is procedurally simple but politically it is much more complex."

Paletta closes saying, "If the debt ceiling is raised $1.2 trillion, it would mean the government wouldn’t need to raise the debt ceiling again until late 2012 or early 2013."

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