http://www.bloomberg.com/apps/news?pid=20601109&sid=aj6qdHrVNXhk
Rising Debt May Cause Sun to Set on U.S. Economy: Chart of Day
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By David Wilson
Sept. 17 (Bloomberg) -- As an economic power, the U.S. may go the way of the British Empire because of the governmentâs increasing debt burden, according to Richard A. Posner, an economist and federal judge.
The CHART OF THE DAY shows how the public debt, or the national debt aside from liabilities for entitlement programs, has climbed in the past year. The chart goes back to March 2005, when the U.S. Treasury started giving daily updates on the debt.
Public debt will keep growing rapidly, Posner wrote earlier this week on a blog he shares with Gary Becker, an economics and sociology professor at the University of Chicago.
Declining tax revenue, rising Medicare costs, congressional reluctance to cut spending or raise levies, and the likely cost of efforts to overhaul health care and promote climate control will push the debt higher, in Posnerâs view.
âAt some point the wheels may start coming off the chassis,â he wrote. âThe United States may find itself in the kind of downward economic spiral in which âdevelopingâ countries often find themselves.â He drew the comparison with the British Empire, whose economic position in the early 20th century was similar to the U.S. role today.
The threat may emerge as the Treasury borrows more and more money, fear of inflation worsens as the Federal Reserve avoids raising interest rates, and government social programs cause unfunded spending to increase, the posting said.
Posnerâs most recent book is âA Failure of Capitalism,â published in May. He is a U.S. Court of Appeals judge for the Seventh Circuit as well as a senior lecturer at the University of Chicago Law School.
(To save a copy of the chart, click here.)
To contact the reporter on this story: David Wilson in New York at dwilson@bloomberg.net
Last Updated: September 17, 2009 10:22 EDT
Rising Debt May Cause Sun to Set on U.S. Economy: Chart of Day
Share | Email | Print | A A A
By David Wilson
Sept. 17 (Bloomberg) -- As an economic power, the U.S. may go the way of the British Empire because of the governmentâs increasing debt burden, according to Richard A. Posner, an economist and federal judge.
The CHART OF THE DAY shows how the public debt, or the national debt aside from liabilities for entitlement programs, has climbed in the past year. The chart goes back to March 2005, when the U.S. Treasury started giving daily updates on the debt.
Public debt will keep growing rapidly, Posner wrote earlier this week on a blog he shares with Gary Becker, an economics and sociology professor at the University of Chicago.
Declining tax revenue, rising Medicare costs, congressional reluctance to cut spending or raise levies, and the likely cost of efforts to overhaul health care and promote climate control will push the debt higher, in Posnerâs view.
âAt some point the wheels may start coming off the chassis,â he wrote. âThe United States may find itself in the kind of downward economic spiral in which âdevelopingâ countries often find themselves.â He drew the comparison with the British Empire, whose economic position in the early 20th century was similar to the U.S. role today.
The threat may emerge as the Treasury borrows more and more money, fear of inflation worsens as the Federal Reserve avoids raising interest rates, and government social programs cause unfunded spending to increase, the posting said.
Posnerâs most recent book is âA Failure of Capitalism,â published in May. He is a U.S. Court of Appeals judge for the Seventh Circuit as well as a senior lecturer at the University of Chicago Law School.
(To save a copy of the chart, click here.)
To contact the reporter on this story: David Wilson in New York at dwilson@bloomberg.net
Last Updated: September 17, 2009 10:22 EDT
