{"id":324,"date":"2010-02-15T10:57:23","date_gmt":"2010-02-15T14:57:23","guid":{"rendered":"http:\/\/zzzptm.com\/wordpress\/?p=324"},"modified":"2010-02-15T10:57:28","modified_gmt":"2010-02-15T14:57:28","slug":"debt-limit-now-100-of-gdp","status":"publish","type":"post","link":"https:\/\/zzzptm.com\/wordpress\/?p=324","title":{"rendered":"Debt Limit Now 100% of GDP"},"content":{"rendered":"<p><a href=\"http:\/\/zzzptm.com\/wordpress\/wp-content\/uploads\/2010\/02\/brillig-nom-national-debt.gif\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/zzzptm.com\/wordpress\/wp-content\/uploads\/2010\/02\/brillig-nom-national-debt-150x150.gif\" alt=\"\" title=\"brillig-nom-national-debt\" width=\"150\" height=\"150\" class=\"alignleft size-thumbnail wp-image-325\" \/><\/a> The image to the right shows the national debt in 2004, when it was just over $7 trillion, or $7,000,000,000,000 for those who like zeroes. In scientific notation, it&#8217;s $7.0 * 10^12. Currently, the debt stands at $12 trillion or so, and the debt limit now lets it go to $14 trillion. <\/p>\n<p>$14 trillion is 100% of GDP, and taking our debt beyond that number puts us in danger of going over a tipping point.<\/p>\n<p><!--more--><\/p>\n<p>I&#8217;m working through a book titled <em>This Time Is Different,<\/em> an economic history of financial disasters. While debt equal to 100% of GDP is not a magical moment that guarantees destruction, like a physics experiment about to go horribly wrong, it still signifies great dangers ahead. Think of it more as a sign that says, &#8220;DANGER! DO NOT ENTER! LANDMINES!&#8221; While a passerby might get lucky and make it through the minefield, chances are he steps right on one and faces terrible consequences.<\/p>\n<p>Actually, in the case of the USA, it&#8217;s more like a sign saying, &#8220;DANGER! YOU&#8217;VE BEEN IN A MINEFIELD FOR SOME TIME, BUT NOW THERE ARE LOADS MORE MINES HERE!&#8221; The USA is in a debt crisis and the proper way out of it isn&#8217;t through borrowing more money.<\/p>\n<p>The problem is that any solution to the situation will be painful. If Congress really does balance the budget, we&#8217;ll have an economic depression. If not, then we may have a borrowing crisis when lenders refuse to lend any more at current rock-bottom rates. An increase in interest rates could break the budget and <em>that<\/em> would force an end to deficit spending&#8230; and another, possibly more severe depression.<\/p>\n<p>So will Congress bite the bullet and slash the budget? Hardly likely, and that&#8217;s my assessment for Republocrats and Demicans alike. This is an election year for one-third of the Senate and the entire House of Representatives. Who wants to campaign on a &#8220;I&#8217;m going to put you through severe pain&#8221; ticket?<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The image to the right shows the national debt in 2004, when it was just over $7 trillion, or $7,000,000,000,000 for those who like zeroes. In scientific notation, it&#8217;s $7.0 * 10^12. Currently, the debt stands at $12 trillion or so, and the debt limit now lets it go to $14 trillion. $14 trillion is [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,5],"tags":[],"class_list":["post-324","post","type-post","status-publish","format-standard","hentry","category-economics","category-us-government"],"_links":{"self":[{"href":"https:\/\/zzzptm.com\/wordpress\/index.php?rest_route=\/wp\/v2\/posts\/324","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zzzptm.com\/wordpress\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zzzptm.com\/wordpress\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zzzptm.com\/wordpress\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/zzzptm.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=324"}],"version-history":[{"count":2,"href":"https:\/\/zzzptm.com\/wordpress\/index.php?rest_route=\/wp\/v2\/posts\/324\/revisions"}],"predecessor-version":[{"id":327,"href":"https:\/\/zzzptm.com\/wordpress\/index.php?rest_route=\/wp\/v2\/posts\/324\/revisions\/327"}],"wp:attachment":[{"href":"https:\/\/zzzptm.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=324"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zzzptm.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=324"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zzzptm.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=324"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}