Great news, everyone. Remember how we were assured that the debt ceiling increase was absolutely essential to preserve the United States of America’s AAA credit rating? It turns out the politicians lied again.
US debt shot up $238 billion to reach 100 percent of gross domestic project after the government’s debt ceiling was lifted, Treasury figures showed Wednesday.
Ratings agencies have warned the country to reduce its debt-to-GDP ratio quickly or facing losing its coveted AAA debt rating. Moody’s said Tuesday that the government needed to stabilize the ratio at 73 percent by 2015 “to ensure that the long-run fiscal trajectory remains compatible with a AAA rating.”
For you non-economists out there, the Gross Domestic Product is the dollar value of all goods and services produced in America in one year. For calendar year 2010 our GDP was $14,530,000,000,000. That’s just a shade under fifteen trillion dollars, admittedly a hard number to comprehend. Since enacting the most recent debt ceiling increase agreed upon by the geniuses in Washington, our government promptly borrowed enough to push our debt to $14,580,000,000,000. That number is bigger than our GDP, making our Debt-to-GDP ratio larger than 1.
This is what’s known among rational human beings as A Very Bad Thing™.
Here’s the data that the Federal Reserve currently has publicly posted for our debt-to-GDP ratio, which is only current through January 1, 2010:
The last time our debt exceeded our GDP was in 1947, when we were winding down from World War II, but at least it was headed in the right direction. If you think the Tea Party is “extreme” in their views, how would you describe the behavior of the politicians and bureaucrats in Washington since the beginning of 2007 when Nancy Pelosi, Barack Obama, and Harry Reid took over and began spraying rivers of tax money across the fruited plains?
We do not have a revenue problem. We have a spending problem.