286 days to accumulate the most recent trillion dollars of debt

[97guns]

If you haven't heard yet, the United States of America just hit $16 trillion in debt yesterday. On a gross, nominal basis, this makes the US, by far, the greatest debtor in the history of the world.

It took the United States government over 200 years to accumulate its first trillion dollars of debt. It took only 286 days to accumulate the most recent trillion dollars of debt. 200 years vs. 286 days. This portends two key points:

1) Anyone who thinks that inflation doesn't exist is a complete idiot
2) To say that the trend is unsustainable is a massive understatement.



Guest Post: Some Clear Thinking On 'The Debt' | ZeroHedge

[97guns]

[UnknownXV]

Indeed it is extremely discouraging. It really does baffle me that there are people who believe this is possible.

And that's the debt not taking into account the unfunded liabilities of SS, medicare and prescription drug programs. If you combined all of that, we're at over 100 trillion in the hole.

Talk about horrific. A child could have managed the governments budget better than our politicians.

[greenskeeper]

Global economy is the greatest ponzi scheme ever.

[EEinNJ]

These numbers do sound staggering, and I'm not defending the government's actions. However, economic experts look at these deficit numbers as a percentage of GDP. This normalizes out both inflation and economic growth. That is, our economy is much, much larger than it was 200 years ago. For better or worse, the government portion of GDP is much larger, as well.

In our current situation, that portion is cut to reduce the deficit, then we go from low growth to recession. That's what the big concern about the "fiscal cliff" is all about.

[YLTL_Dan]

These numbers do sound staggering, and I'm not defending the government's actions. However, economic experts look at these deficit numbers as a percentage of GDP.

I'm with EEinNJ on this... it's bad, but I'm not going to let it ruin my day (or life). As a percentage of GDP, we're somewhere around 103% right now, meaning we have more debt than the total of all goods we produce in a year. The only highest period was between the Great Depression and WWII when it got all the way up to 121.7% in 1941.

Also, if you compare our debt per capita with other countries, we're still quite a bit lower than other countries at around $50k per person. I'm not a huge fan of comparing ourselves to Euro countries, but the UK is $140k per capita and Germany is $58k.

We're in bad shape, but if you look at what we've gone through - two wars and a near depression - it's easy to see why. I hope the economy starts to turn around and the national debt goes the other way... we also need the government to get in line, but I'm not holding my breath for that. I discuss the US Government debt further on my blog.

[97guns]

QEIII announced today, looks like more inflation coming



To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month.

The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities.

These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.