Washington D.C. is bitterly divided. On one hand we have President Obama and the Democrat party placing the country on a collision course with economic fulfillment of their version of social justice. On the other hand, Republicans in Congress impotently observing, and even more impotently trying to convince a skeptical voting public that they can do the right thing by the economy, yet still keep promises to voters who were ... well ... promised stuff.
Seemingly lost in the debate is a burgeoning public debt that is, literally, now at the levels of our almost bankrupt European Union Nation colleagues.
As the public debt has now hit $16.4 trillion, and Congress is now facing yet another vote to increase the ever-irresponsible government's credit card limit to something probably much higher, our public debt ratio has become 102.94% of our Gross Domestic Product (GDP). This means our government owes more than our entire country (government and non-goverment) spends for anything, even with inflation counted in!
To give you a recap, let's review the countries that are the biggest economic threat to the cohesion of the European Union, and their respective public debt/GDP ratios:
- Greece - 160.81%
- Italy - 120.9%
- Ireland - 104.95%
- Spain - 68.47%
- France - 86.26%
- Austria - 72.2%
- Belgium - 98.51%
These are not the only EU member nations. But with our own stock market significantly affected by the public debt and banking industry problems of the countries listed above, it begs the question:
Since we are most definitely in the same ratio league as these beleaguered nations, why is Washington D.C. ignoring it?
There is no simple answer. But readers of this series of articles on the economy should well understand that, with the United States government now borrowing close to 45 cents of every dollar they spend, our government's lenders (China, Japan, UK among others) are expecting a lot of interest on the debt.
We are the world's backup currency. Heaven help the world's economy if we cannot find a way to deal with our exploding public debt.