Public Debt to Surpass GDP by 2012 Under Obama

[pspr]

http://www.bloomberg.com/apps/news?pid=20601109&sid=aa0cI64Gx.4E&pos=15

June 4 (Bloomberg) -- President Barack Obama is poised to increase the U.S. debt to a level that exceeds the value of the nation’s annual economic output, a step toward what Bill Gross called a “debt super cycle.”

The CHART OF THE DAY tracks U.S. gross domestic product and the government’s total debt, which rose past $13 trillion for the first time this month. The amount owed will surpass GDP in 2012, based on forecasts by the International Monetary Fund. The lower panel shows U.S. annual GDP growth as tracked by the IMF, which projects the world’s largest economy to expand at a slower pace than the 3.2 percent average during the past five decades........

 

[Trendytrader]

Please remove the posting as no negative market news is allowed. By the authority of Obamanomics.

 

[TGregg]

Yeah, I should change the title to "Federal Debt stays below 25 trillion under fiscally responsible Obama Administration".

 

[pspr]

Ha ha ha ha. Not to worry. Obama knows who has the printing press.

 

[TGregg]

Linky no worky BTW.

 

[Trendytrader]

Looks like the Obamanomics "good news" team at work

 

[pspr]

Quote from TGregg:

Linky no worky BTW.

That's weird. The whole story seems to have dissappeared.

 

[MattF]

By Garfield Reynolds and Wes Goodman

June 4 (Bloomberg) -- President Barack Obama is poised to increase the U.S. debt to a level that exceeds the value of the nation’s annual economic output, a step toward what Bill Gross called a “debt super cycle.”

The CHART OF THE DAY tracks U.S. gross domestic product and the government’s total debt, which rose past $13 trillion for the first time this month. The amount owed will surpass GDP in 2012, based on forecasts by the International Monetary Fund. The lower panel shows U.S. annual GDP growth as tracked by the IMF, which projects the world’s largest economy to expand at a slower pace than the 3.2 percent average during the past five decades.

“Over the long term, interest rates on government debt will likely have to rise to attract investors,” said Hiroki Shimazu, a market economist in Tokyo at Nikko Cordial Securities Inc., a unit of Japan’s third-largest publicly traded bank. “That will be a big burden on the government and the people.”

Gross, who runs the world’s largest mutual fund at Pacific Investment Management Co. in Newport Beach, California, said in his June outlook report that “the debt super cycle trend” suggests U.S. economic growth won’t be enough to support the borrowings “if real interest rates were ever to go up instead of down.”

Dan Fuss, who manages the Loomis Sayles Bond Fund, which beat 94 percent of competitors the past year, said last week that he sold all of his Treasury bonds because of prospects interest rates will rise as the U.S. borrows unprecedented amounts. Obama is borrowing record amounts to fund spending programs to help the economy recover from its longest recession since the 1930s.

“The incremental borrower of funds in the U.S. capital markets is rapidly becoming the U.S. Treasury,” Boston-based Fuss said. “Do you really want to buy the debt of the biggest issuer?”

http://preview.bloomberg.com/news/2...-to-overtake-weigh-down-gdp-chart-of-day.html

better grab it again before it disappears

 

[TGregg]

Could you imagine high rates and deflation? Yuck. Take your wad and dump it into a CD and feel like a BSD, LOL.

 

[Misthos]

Public debt is already well over 100% of gdp.

Don't forget, more so than any other country in the world, the US has a HUGE municipal, county, and state bond market. Also don't forget the GSE debts. Fannie and Freddie are not counted, yet we are on the hook.

From Jesse's Cafe Amercain blog:

http://jessescrossroadscafe.blogspot.com/2010/06/us-total-government-debt-reaches-130-of.html

This is not a democrat or republican thing. Look at the chart - it began under Reagan. Both parties need to spend to keep the economy from imploding. A large part of the economy, IMHO, has been a fiction for about 30 years.

So, we're worse then Greece in terms of debt to GDP, we have the same percentage of public employees as they do, our deficit to gdp is also similar (over 10%).

Oh yeah... we have a printing press. That's where we differ from Greece. So basically, we delay belt tightening today for a catastrophe tomorrow.

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

-Ludwig von Mises