Not a Good Sign

By Alan Stewart Carl | Related entries in Economy

Within the next two years, the US National Debt Clock located near Times Square will run out of digits. That’s right, we’re approaching the 10 trillion dollar debt mark.

$10,000,000,000,000.

At some point this will be an issue again. Hopefully some point very soon.


This entry was posted on Thursday, March 30th, 2006 and is filed under Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

13 Responses to “Not a Good Sign”

  1. Lonely Federalist Says:

    Agreed, hopefully very soon Congress will stop spending our grocery money on beer and cigarettes.

  2. FasthandsErnestine Says:

    This is very scary. We are borrowing so much money that we are bound to become a third world country. How can we be a “super power”, when we owe so much money to people. The dollar won’t be worth a penny and people will start moving over to the Euro. Then, we’ll be up Sh_ _ _ Creek. All this out sourcing is going to hurt us in the end. We have become a consumer nation and seem to have nothing to offer the rest of the world. No one buys anything from us any more, we buy from them. People need to wake up!!!!!!!!!

  3. Meredith Says:

    We’re going down.

  4. Tom Says:

    There’s a reason I’ve been investing outside the country. Too much dollar risk.

    I’m just hoping for gridlock after the next election, and hoping that we don’t “make the tax cuts permenant” before that. And hoping that Iraq calms down enough that we can cut down our presence there.

  5. Jimmy the Dhimmi Says:

    Stop your panicking and calm down everybody. Yes our national debt is about 8 trillion dollars, and that is unprecidenedly high…however, our GDP is 12 trillion dollars, which has also never been achieved. It is a ratio of about 65%, which is subsatntially lower than almost every industrialized nation except Australia, and has remained at that level rather consistantly for the past 15 years.

    We owe 600 billion to the Japanese! The apocalypse is coming! Japan is taking all our money and is poised to dominate us! oh, wait, Japan’s national debt is 170% of their GDP!

    Dont give me this bunk about how our grandchildren will have to pay off our debts. When do you assume debt roll-over will become illegal or impossible in the future? When has that ever happened? When my grandfather was my age, the country’s debt was 120% of GDP. I’m living rather well compared to how he lived back then!

    Don’t give me your crap about interest on the debt either. Its currently about 9% of our tax receipts, which is substantially less than the 18% we experienced during Clinton’s surplus years. Our interest rates are amongst the lowest in the world, because our economy is always so good that foreign lenders like to invest in our currency.

    As long as we create more wealth than we owe, we will be fine. Would you rather live in 12 trillion$ economy with an 8 trillion$ debt, or in a 12 billion$ economy with only an 8 billion$ debt?

  6. Meredith Says:

    Thanks for the info Jimmy. I was being partially sarcastic anyway, but still . . . I think we’re going down!

  7. Jeff B. Says:

    Totally going down. Penthouse to the outhouse.

  8. Alan Stewart Carl Says:

    Jimmy,

    You’re right, there’s no need to panic. But there’s no reason to be complacent either. You’re right that we’ll be fine if our economy stays strong. But I’d prefer that we not have to qualify our future with an “if.” The debt is a burden and a risk. We need to be concerned.

  9. ford4x4 Says:

    …besides, once the clock runs out of room, we can’t run up any more debt, right?

  10. GN Says:

    Our GDP is a measure of the fluff dollars that we bring back from the world at large. Our GDP used to be hard dollars from domestic manufacturing. I remember the old days of 5 year plans … as opposed to the current less than 1 year payback that is the average for project cap today. We may look like we are going steady …. but we are going down. There is more disparity between classes right now than at any time I can remember in my lifetime.

    “As long as we create more wealth than we owe, we will be fine.”

    As long as you have a job at the same or more income, you can pay your mortgage, but if there is the slightest bump in the road …. 12mill to 8trill or 12mill to 8bill doesn’t mean squat. I you need a dollar and only have a dime feels the same as needing $10 and having a buck.

  11. Tom Says:

    Jimmi: When your grandfather was your age, the population curve was still very steep. No longer. You’re assuming we’re going to continue to see the same kind of economic growth over time, and I don’t see any reason to think you’re right.

  12. BrianOfAtlanta Says:

    Tom: The reason is immigration. That’s one of the major reasons why the isolationists of the far Left and far Right are dangerous to their country.

  13. Jimmy the Dhimmi Says:

    As long as America makes stuff that people want to buy, wheteher that be domestic manufacturing, or agriculure, finacial services, technology, real estate ect, and as long as Americans have money to spend, real wealth does accumulate. You also have to ask, “what are we getting with the money we borrow?” As long as it is invested in something worthwhile and pro growth, like national defense, roads&bridges, education, scientific grants, ect…its not fluff.

    As long as your GDP grows along with your debt, a large debt may actually be a sign of a healthy and stable economy because it shows that foreigners trust our economy enough to invest in it. As one T-bond matures, they buy another. No one is going to throw their money away into a pit if they don’t expect returns.

    TOM: Because of the technological revolution in the world today, productivity has never been higher in the history of the world. That is a good enough reason for me to think growth will continue (unless there is an apocalypic war with Iran!).
    You do make a good point about the population curve. It reflects more on reforming Social Security than economic growth. Means-testing for Social Security might solve the problem, but it would hurt economic growth, while replacing it with a 401K type of plan would likely increase growth even more.

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