A bipartisan commission of fiscal analysts warned Monday that the U.S. public debt is piling up so rapidly that it threatens to plunge the nation into crisis if Congress and the White House do not reverse course within two years. In the past year alone, the U.S. debt level soared from 41 percent of gross domestic product (GDP) to 53 percent, said the report by the Peterson-Pew Commission on Budget Reform, prepared in cooperation with the Committee for a Responsible Federal Budget.
The federal government spent $1.7 trillion last year more than it brought in tax revenue. It had to borrow that amount. This increased the outstanding public debt to $14.2 trillion - or 96 percent of GDP. This includes that part owned by the Social Security trust fund and the Federal Reserve, but does not include the unfunded liabilities of Medicare, Medicaid and Social Security, which will add an additional $46 trillion to the deficit in present-value terms over the next 75 years. This is not sustainable. Without spending cuts and/or tax increases, this amount will not only continue growing without end but will increase as a share of GDP until bondholders no longer trust the government's ability to pay the interest required. At that point, they will dump U.S. Treasuries.
According to The New York Times, 37 percent of the 2009-2012 deficit stems from the recession itself, because of revenue losses and increased automatic relief outlays. Do we need bigger economic stimulus now to promote a faster recovery? (Yes.) Should we reduce deficits and the ratio of debt to GDP once a strong recovery comes? (Yes.) Does this require an extra-legislative commission? (No.) Do we need to slash social insurance in order to achieve fiscal balance? (No.) Are there other ways to get to a sustainable budget? (Most definitely.) Despite the aiarmism, the Congressional Budget Office projects that deficits will stabilize at about 3.2 percent of GDP after 2014 and that the public debt will plateau below 70 percent of GDP.
Greece's entry into the euro by dishonest means now threatens the euro's survival. According to any normal financial analysis, Greece is insolvent. With public debt of $329 billion, or 142.8 percent of GDP, and a negative growth rate of 5.5 percent, Greece appears headed for bankruptcy. A national default within the eurozone would threaten the continued viability of the euro and, with it, the world's currency markets.
This article features a panel discussion on the future of U.S. entitlement spending organized by Jeff Brown for the American Risk and Insurance Association 2006 Annual Meeting. According to Dr. Katherine Baicker, a member of the President's Council for Economic Advisors, discussion of the relative stability of total federal spending and revenues masks a major shift in the underlying composition of the federal budget that foretells trouble in the future if nothing changes. Dr. Douglas Holtz-Eakin, director of the Maurice Greenberg Center for Geo-economic Studies, says that is true that U.S. fiscal policy is unsustainable, and one way to think about the problem is to choose a metric for sustainability. The metric that he would suggest to you is the debt in the hands of the public as a fr...
TOKYO - Japanese voters handed a stinging electoral defeat to the ruling party Sunday, exit polls showed, rejecting a proposal to increase taxes. With public spending at more than double its GDP, Japan is trying to manage its ballooning debt while also addressing high unemployment and stagnant growth. Prime Minister Naoto Kan has warned the country could face a Greek-style meltdown if it does not get its finances in order - possibly by raising the sales tax.
This study will examine the United States, China, and the United Kingdom's business strategies for political and economic operations. This analysis is aimed at determining if their strategy is working successfully or not. Statistical data has indicated the effectiveness of these governments. The United States scored high in five of seven categories, while the United Kingdom's parliamentary monarchy ranked second in four of seven categories; China's communism ranked third in four of seven categories.
..., unemployment rate, national budget, public debt, Human Development Index, imports and exports...
... the tragedy of the commons states that a publicly owned good will tend to be overexploited and disap... has contributed to the current sovereign-debt crisis in Europe. In this article, I explain how a...
''There he goes again, folks," Ronald Reagan might say, shaking his head ruefully, as Barack Obama goes charging off on that same spavined old big-spending government horse, riding straight into a box canyon where certain disaster awaits America. The president's planned fiscal excesses beyond 2010 cannot plausibly be attributed to the recession, blamed on George W. Bush or justified by economic principles, Keynesian or otherwise. They are simply irresponsible to the point of willful endangerment. The public debt will be at least an astronomical 91 percent of gross domestic product (GDP) in 2020 - and the gross debt will be at least 123 percent of GDP (compared with 125 percent in Greece) and greatly in excess of the fatal "tipping point" identified by recent academic research.
Simple math It doesn't take an economist to understand what public debt at Greece-like levels of 90 percent of GDP by 2020 inevitably portends. Nor to realize the effects of the yawning disconnect between federal spending at 24 percent of GDP and revenue at 19 percent of GDP. Nor to understand the most basic of all budgetary concepts - that the health care bill, after the fizzy party, after all the huzzahs over "making history," always comes due, and with interest.
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