The Obama administration won a reprieve this week from some particularly scary economic news that had been projected to occur around Halloween.
The news: The ever-escalating national debt will hit and then surpass the size of the entire U.S. economy -- an ignominious distinction previously achieved by the likes of Japan, Italy and Greece.
The reprieve: The Bureau of Economic Analysis posted third-quarter growth figures showing the economy grew at an annual rate of 2.5% through September -- raising the bar to $15.2 trillion.
As a result, the gross national debt, which is what the federal government owes both to outside creditors and its own trust funds (notably Social Security), won't reach 100% of the economy for another month or two. It's a mere $14.9 trillion.
That delays earlier projections, based on second-quarter growth figures, that had fiscal watchdogs and others trying to pinpoint the date when the debt would surpass the size of the nation's gross domestic product.
The website ZeroHedge was among the first to zero in on Halloween, based on an upcoming Treasury bond auction. It was joined by conservative websites such as Townhall and DailyCaller, as well as The Atlantic.
But officials at the Bipartisan Policy Center correctly noted that a growing economy will push the date into November or December. It will take that long for the debt to grow another, oh, $260 billion.
Whew, you say? Hardly.
A debt-to-GDP ratio of 98% is bad enough. It puts the U.S. closer to rarified territory -- countries that owe more than they produce in a year.
Japan is at the head of the class with a 220% debt-to-GDP ratio. Italy, being watched closely now for signs that the European debt crisis based in Greece could be spreading, is around 120%.
Even the troubled 17-nation eurozone is better off than the U.S. in this regard, with a ratio under 90%. So much for U.S. economic leadership.
No comments:
Post a Comment