I wish more Americans would understand this key ratio instead of listening to the psuedo intellectual wannabes who are diehard Obama supporters. Stupid is as stupid does. Numbers don't lie, but people do. Remember it was the intelligentsia community that got our country into this economic mess to begin with and kept lying to public the entire time telling us everything was great, nothing to worry about. Remember too that our federal government BOTH democrats and republicans were singing in harmony with them (with an exception of a few). Well, they're playing the same tune folks... and all blindly following the same pied pipers.
"In economics, the Debt-to-GDP ratio is one of the indicators of the health of an economy. It is the amount of national debt of a country as a percentage of its Gross Domestic Product (GDP). A low debt-to-GDP ratio indicates an economy that produces a large number of goods and services and probably profits that are high enough to pay back debts. Governments aim for low debt-to-GDP ratios and can stand-up to the risks involved by increasing debt as their economies have a higher gdp and profit margin." [source: wikipedia]
"What Does Debt-To-GDP Ratio Mean? A measure of a country's federal debt in relation to its gross domestic product (GDP). By comparing what a country owes and what it produces, the debt-to-GDP ratio indicates the country's ability to pay back its debt. The ratio is a coverage ratio on a national level.
Debt-To-GDP Ratio explained: This measure gives an idea of the ability of a country to make future payments on its debt. If a country were unable to pay its debt, it would default, which could cause a panic in the domestic and international markets. The higher the debt-to-GDP ratio, the less likely the country will pay its debt back, and the higher its risk of default." [source: Investopedia]
Would you like an eye opener? Our National Debt Interest expense for the month of June 2011 was $110,536,580,221.63. That's $110.5 BILLION tax dollars going to pay for the interest on our national debt for one month only. If you want to see the Interest Expense on the Debt Outstanding figures for yourself, please click HERE to be directed to the Treasury Direct government webpage.
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AFP
written by Staff
Wednesday August 3, 2011
WASHINGTON — US gross debt shot up $238 billion to reach 100 percent of gross domestic product after the government's debt ceiling was lifted, Treasury figures showed.
On Tuesday, the Treasury had to add more than $200 billion of commitments immediately after President Barack Obama signed into law an increase in the debt ceiling.
The liabilities had been temporarily taken off the federal government's balance sheet since May 16, when the Treasury reached the $14.29 trillion official cap.
It then used extraordinary measures to remain under the legal limit while deeply polarized Republicans and Democrats battled over raising the debt ceiling and reining in the country's massive deficit.
The new borrowing took total public debt to $14.58 trillion, over end-2010 GDP of $14.53 trillion, putting the United States in a league with highly indebted countries like Italy and Belgium.
Public debt subject to the official debt limit -- a slightly tighter definition -- was $14.53 trillion as of the end of Tuesday, rising from the previous official cap of $14.29 trillion a day earlier.
The official limit was hiked $400 billion on Tuesday and will be increased in stages over the next 18 months.
With the latest borrowing, the United States joined a small group of countries whose public debt exceeds GDP, including Japan (229 percent), Greece (152 percent), Jamaica (137 percent), Lebanon (134 percent), Italy (120 percent), Ireland (114 percent) and Iceland (103 percent), according to figures provided by the International Monetary Fund.
The last time US debt exceeded its annual economy was in 1947 just after World War II. By 1981 it had fallen to 32.5 percent.
Ratings agencies have warned the country to reduce its net 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."
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