The U.S. federal debt has surpassed the total production of the entire country. According to a feature article in USA Today, total debt of $15.3 trillion now exceeds GDP.
Anyone who has been paying just a little bit of attention has known for some time that at the rapid rate the debt was increasing it was destined to exceed the GDP. But, as the report documents, only six other nations in the developed world – all in perilous condition - have debt levels that exceed their total economic output: Greece, Iceland, Ireland, Italy, Japan and Portugal.
Within a decade, the Obama administration projects the debt will increase another 70 percent to $26 trillion. Even if the economy could grow at an average annual rate of 3 percent over the decade, GDP would be just barely $20 trillion, leaving a debt-to-GDP ratio of 128 percent.
From USA Today:
Among advanced economies, only Greece, Iceland, Ireland, Italy, Japan and Portugal have debts larger than their economies. Greece, Ireland, Portugal and Italy are at the root of the European debt crisis. The first three needed bailouts from European central banks; Italy's books are monitored by the International Monetary Fund.
The White House and Congress agreed in August to cut about $1 trillion from federal agencies over 10 years. An additional $1.2 trillion in automatic spending cuts looms beginning next year if lawmakers can't agree on a better way to do it.
Economist Mark Zandi of Moody's Analytics says reaching the 100% mark shows "the grave need to address our long-term fiscal problems."
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