Reading that the new debt limit coming out of the "debt reduction deal" is $16.8 trillion, I got my pen out and jotted down some numbers:
2nd Quarter 2011 GDP: $15.00 trillion/yr.
Current national debt: $14.3 trillion
(self-cancelling) internal debt: $4.6 trillion
Net debt: $9.7 trillion
65% of GDP
Of the $4.6 trillion in internal debt, about $2.6 trillion is the Social Security 'trust fund' (which is 'invested in' U.S. treasury bonds) and about $0.3 trillion is the Medicare 'trust fund.' There are lots of other 'trust funds' beyond these (e.g., the Highway 'fund') The thing all of these trust funds have in common is that their balances are falling.
If I assume that the rate of deficit spending is about $1.6 or $1.7 trillion/yr., we'll reach the new $16.8 trillion debt limit right around inauguration day, January 20, 2013. If the economy grows at about 2%/yr. between now and inauguration day (assuming no new recession), it will be operating at $15.45 trillion/yr.
That means the debt to GDP ratio will have deteriorated dramatically:
1st Quarter 2013 GDP: $15.45 trillion/yr.
Current national debt: $16.8 trillion
(self-cancelling) internal debt: $4.4 trillion
Net debt: $12.4 trillion
80% of GDPOnly in Washington could a plan to increase the national debt from 65% to 80% of GDP in less than a year and a half be called a "debt reduction" deal.
And for the RINO leadership -- who are today leaders because of the resurgent conservative movement -- to negotiate with themselves when confronted with deficits that are well nigh insurmountable... well, it points to one thing:
We need new leadership in the House and the Senate.
How does the combination of Speaker Allen West and Senate Majority Leader Marco Rubio sound to you?
5 comments:
The more I see and hear from the current crop of failures, the more and more I agree with your suggestion of West and Rubio to take over the top spots in Congress. What we have now is worthless. Good stuff, Doug...read everything you post.
It sounds like Moses leading the Jews out of slavery in Egypt.
I just do not see Rubio as some great star. He refuses to make it clear that certain activities, regardless of public appeal are simply evil. I will never trust the man to any more power than he already has. There has to be better.
As for West, a man who is already attacking his voters as crazy does not make me feel all warm and fuzzy.
Didnt Allen West vote FOR this "debt deal" ????
Yep, but West was right 99% of the time. No one's perfect.
I have the deep suspicion that Boehner pulled every trick in the book to get West on board.
I'll wait for West's autobiography to find out what really happened.
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