US debt right now is estimated to be about 16 trillion dollars. David Walker as guest on Yahoo Finance says yes, US debt is $16 trillion on paper, but the reality is that unfunded Social Security promises and unfunded Medicare promises are unaccounted for, which brings US debt to $70 trillion. The rate this deficit is compounding, he says, grows at $10 million a minute. This means it takes 10 minutes to get 100 million more in debt, so in 100 minutes—there’s 1 billion. If you divide 100 minutes into the amount of minutes in one day—1440—then that equates to 14.4 billion dollars a day America is accruing on its balance sheet.
Taking these numbers a little further gives rise to suspect projections along with a sense of salesmanship on the part of the guest. His claims, for example, imply the US is procuring $1 trillion in debt every 7 days; well, that means in a year, America will have added $52 trillion to its, now, $70 trillion. Kind of seems spectacular, maybe some smoke and mirrors here to build the hype.
Whatever the rate is, one thing is certain: America has a serious debt issue. The pros about America are obvious in that we have the largest GDP in the world. In 2011, the US GDP was over $15 trillion. That is, by the way, below the EUs GDP of $17.5 trillion in 2011. But take into account that comprises 27 members including, Germany, France, Sweden, and others, and some are in serious debt trouble, i.e. Greece, Italy, and Spain. This is the aftermath of the US selling EU members subprime mortgages bundled in stocks that went south. And even though the US produces a lot of dough, it cost the US 106% to make that money. Its debt/GDP ratio is over a 100%. Greece’s debt/GDP ratio is over 130%. Beyond the horizon looms there like a tower standing over you jutting out into the clouds.
Now, if you read this article you may discover discrepancies in my numbers versus their’s. They use CBO (Congressional Budget Office) data, which the CBO claims US GDP may go above 70% this year. My numbers, and this article, show clearly we have already gone over 50% of CBO projections. Either someone is sweeping the dirt under the carpet or things got lost in translation. Either way, it’s not good.
A silver lining here may be, according to the CBO, that if Bush-era tax cuts expire then this could bring down debt to GDP by over 50%. This is a nice theory, and I will believe it when I see it.