ALL YOU ZOMBIES

[HiredGun]

The graphs really tell the tale here, horriyfing trends, all in one convenient article.

http://www.financialsense.com/editorials/quinn/2009/1123.html

In 1997, the United States spent approximately $300 billion annually on Defense related areas. Today, we are spending in excess of $900 billion in those same areas. At the end of 1997, the National Debt was $5.4 trillion. If Congress and the Presidents had chosen to prepare the country for the unavoidable Crisis period of twenty years, they would have scaled back government spending, tackled the Social Security and Medicare train wreck, developed a multi-pronged energy plan, and asked Americans to save. Instead, they pressed their foot to the accelerator as they approached a curve on a mountain road. Today, the National Debt stands at $12.1 trillion. Our politicians proceeded to saddle us with an additional $6.7 trillion of debt in the space of 12 years, after taking 208 years to accumulate $5.4 trillion of debt. Based on current projections, the National Debt will exceed $25 trillion by 2019. These reckless actions were akin to entering winter by not paying your utility bill for a year, having your windows wide open, not having the oil changed in your car for 10,000 miles, and being two quarts low with your anti-freeze.

http://www.financialsense...s/1123_clip_image004.jpg

[John Masterson]

Remember, this is an annual economy of $14,400,000,000,000. And it is still growing, though slower.

The United States is currently embroiled in the largest military and defense campaign since the WWII/Korean War era.

We were at 120% of GDP in debt in 1946.  But we survived.

Today on a morning news discussion roundtable a Nobel-prizewinning economist explained that the US can handle this kind of debt without a real problem.  He knows more about it than I do.

[I D Shukhov]

I think you have to look at what made up our GDP in the 50's - 80's and what it is today. GDP is not a measure of what a country usefully produces.  Health care contributes to GDP.  I think all services add to it, such as the value of retailers selling foreign-made cars and electronics.  Before,  we could pay for what we imported with goods that we exported.  Not anymore.

[benali72]

Not being an economist I find it hard to judge whether this level of debt is really serious or not.

But my guess is -- serious -- mainly because we continue to spend (overseas militarism, at-home social benefits and stimulus, and a trade deficit that is simply unsustainable).  We are not reining in our spending or debt.  We are not in any way at all addressing the problem.

We had this issue in the early 1990s, and Pres Clinton's administration did a great job of addressing it (perhaps due to the political power demonstrated by the Perot movement).  But Pres Obama is not recognizing these problems at all in his policies.

My main concern is that we continue our gradual decline (like our continuing dollar devaluation, 50% over the past few years vs the Euro) rather than hit a sudden collapse (like Mexico in 1994 or Thailand a few years later).

[Aussie]

How much is private and how much is public debt ?  A dispassionate observer might suggest that, to criticise a high govt debt, while holding a high (or non-low) personal debt is a bit hypocritical.

When I was a kid, in what you guys would probably call early elementary school, we used to have something called 'Banking Day' each week.  You had a passbook of sorts, and you brought in a dollar or two dollars (which in those days were banknotes, not coins).  Then you got a nice looking stamp in your child's passbook for each dollar or two-dollar.  Interest of only 2 or 3% probably, and no fees.  These days, all the banks want to say to kids is "Piss off, pauper!".  But the relevant bank then was the government-owned Commonwealth Bank.  It's since been privatised.