By Robert Romano
The national debt to GDP ratio is now over 100 percent. It’s official
Well, almost. We’ll know more when the first quarter Gross Domestic
Product (GDP) numbers are published by the Bureau of Economic Analysis
on April 27.
But, based on a preliminary analysis of data on the GDP and national
debt figures from the Bureau
and the U.S.
Treasury, barring greater than expected GDP growth in the first
quarter, the national debt probably eclipsed the economy in sheer size,
perhaps never to return, on or about Feb. 23, 2012.
Since the beginning of the year, the national debt has grown by
$265.58 billion, or about $4.42 billion every day, to $15.488 trillion.
That compares with an economy that is probably only growing by about
$1.66 billion a day to a current level of about $15.420 trillion.
Therefore, the current debt to GDP ratio is already 100.4 percent —
When Barack Obama took office it was a little over 74 percent when
the debt was about $10.4 trillion. The reason the ratio has skyrocketed
is because the debt has been growing much faster than the economy.
While the economy grew at 1.8 percent in 2011, the debt grew by over 10
percent, an astounding figure.
In 2012, this process will continue, when the debt will grow at over 7
percent for the year, much faster than the economy, which is only
expected to grow at 3 percent.
economists, calling themselves Modern Monetary Theorists, still
maintain remarkably that debt really does not matter at all. That as
long as the nation’s central bank prints more money to perpetually
refinance the debt, all is well.
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