Paper Economy - A US Real Estate Bubble Blog

Thursday, February 21, 2013

Recession Watch 2013: Federal Debt to GDP


The year 2012 marked the first time in at least 40 years that total federal government debt surpassed the total nominal GDP.

In fact, the debt-to-GDP ratio lurched over the 100% mark in the first quarter of 2012 and never looked back, continuing its trend upward and now seems destined to close the gap to 102% before long.

Yes, it's just a single measure and in many circles these days (particularly Keynesian policy junkies) hardly stirs the slightest concern, but, be that as it may, it's worth tracking as eventually this relationship may ultimately be recognized as one of the strongest and most damming pieces of evidence against the solvency of the U.S. government.

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