America’s Debt
With all the talk about government spending, bailouts, mortgage markets and debt, I wanted to see the numbers for myself to try to make sense out of it all.
Government Spending and National Debt
Just a couple years ago, the national debt was $5 trillion. Now it’s close to $12 trillion. Is that a lot? Well, in recent years there have been plenty of people, including some conservatives, who say that this debt is still manageable, because as a percentage of GDP, it is still not as high as it was during WWII. However, we are quickly getting to that level, and analysis shows that we are on a trajectory that could quickly get out of control, and entitlement spending will soon drive government spending to an unsustainable level.
Total Debt Market
Government debt is only part of the total debt in the market. What does the total debt market look like? Well, I decided to get the data myself. I pulled numbers from a Federal Reserve report, plotted the graph, and this is the result:
From this chart, we learn that the national debt is huge, but some other sectors are even more massive. Our economy is obsessed with debt at every level, from government to consumers to homebuyers. Is this sustainable? Take a look at this chart, and tell me what you think:
I believe the economic downturn is actually a contraction of massive scale. We have become so accustomed to debt at every level, that now our economy depends on it to function. Isn’t it interesting and ironic that the goal of the economic stimulus is to restore the credit markets and get lending going again?
Check out this video I made, entitled “How Much is a Trillion?”
Hi, I'm David Richins. I produce creative videos that help tell a story. Click some of the images on the left to see examples of my work.
