U.S. Debt Could Be 2,000% Of GDP: A $400 Trillion Nightmare

by | Sep 13, 2019 | Experts, Forecasting, Headline News | 16 comments

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    A new report has said that the real United States national debt could be well over what politicians tell us it is.  At a whopping $400 trillion, the U.S. debt would be 2,000% of GDP (gross domestic product) according to new calculations that include the federal government, state, local, financial, and so-called entitlement debt.

    AB Bernstein, a global asset management firm based on Wall Street, came up with these figures by including in its analysis not only traditional levels of public debt, such as bonds but also financial debt as well as future obligations for entitlement programs, according to a report by CNBC. These include social security, Medicare and public pensions and are often left out of the discussion.  They are unfunded liabilities, however, and should be included if we’re to get an appropriate understanding of the government’s mishandling of money.

    In its report, AB Bernstein took debt from a number of sources and compared it to GDP. Using this methodology, federal, state and local government debt combined amounted to 100 percent of GDP. Households and firms accounted for 150 percent, while debt held by financial firms came to 450 percent. Another 27 percent came from trusts for social insurance programs, 484 percent from promises under current social insurance programs, and 633 percent from obligations for social programs. The total debt, therefore, amounted to 1,832 percent. –RT

    US debt is large. And it’s growing. But if we want to think about debt problems (in any sector – sovereign, households, firms or financials), the conditions rather than the levels are more significant,” Philipp Carlsson-Szlezak, chief US economist at AB Bernstein, said in the report. “While the picture is dire, such numbers don’t prove we are doomed or that a debt crisis is inevitable,” he said.

    Changes can be made in accounting or in policy that could lower that number.  But even then, there’s only so low it can actually go.  Anyone with even a partial understanding of the national debt can see that it will never be paid back and those who are depending on future money (pensioners and social security recipients) will one day find themselves in a pretty bad situation.

    The total federal outstanding U.S. debt has recently jumped to $22.5 trillion, or about 106 percent of GDP, CNBC reported. Without the intergovernmental obligations, debt held by the public amounts to $16.7 trillion, or 78 percent of GDP. Carlsson-Szlezak noted in the report, however, that different debt carries different risks and its impact on individual parts of the economy would vary. “A default on US treasury bonds would be catastrophic to the global economy – whereas changes in policy (while painful for those whose future benefits were diminished) would barely register on the economic horizon,” he stated.


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      1. Trump ain’t worried. More debt he says. But he’s not wrong. All credit/currency is debt created when it is loaned with usury added. Of course it won’t ever be paid back. Should it all be paid back there would be no money supply. It’s MMT. No sound money, just debt to the moon until it all collapses.

        Saaaay…this is like what I used to do when I wanted to junk a car at my buddy’s junkyard. Run it with no water or oil until the temperature gauge pegged and the oil light came on.

        Then put a brick on the gas pedal.

        • Which implies it’s all bullshit. As always, you’re born into an upper class or you’re not.

          If money just poofs into existence at their say-so and poofs right back out at their say-so is there a point? I mean on a grand scale. Obviously if you wanna buy toilet paper at the store there’s a point but in terms of class mobility I mean.

      2. Time to start inventing a time machine. It’s cheaper.

        Go back in time and wipe out the New Deal entirely. Or hell why stop there, wipe out the entire emergence of the British Empire. Or hell why stop there…

      3. whereas changes in policy (while painful for those whose future benefits were diminished) would barely register on the economic horizon,”

        And there it is.

        Painful? Beh who gives a fuck. Peasants. Whatever.

        Promise them all sorts of shit so we can get elected. Weekend at Epstein’s. Free drinks. Whatever.

      4. When I bought my first house it cost about 2.8 times my annual income. That is the excuse these Democrats use to justify the excessive debt. Problem is with each payment my debt decreased, the government isn’t even trying to do that and that is the Federal problem ever increasing debt.
        The other problem of public union pensions is the cozy relationship of Democrat run cities and states bargaining with Democrat unions that donate to Democrat politicians get it? I hope every one of those public union pensioners get a major “haircut”, when their public institutions runs into the ground under Democrat control and cannot pay their obligations. Detroit is an example, many other large cities and a few states are heading there quickly.
        Social security is close behind. I will start getting SS in 2 years, (age 66) so I expect to get 12 years or so of my full pay that I earned, and then a “haircut” at age 78. It will be fun to watch the Democrat Socialist party be destroyed by that.

        • ROTFLMAO, “full pay”.
          And which hairs according to Soupy Sales are being cut?

      5. rellik

        A home costing 3x of annual income was the standard and mortgages weren’t at 3.5% in the 1980s.

        • K2,
          I had a VA 0 down loan I think my interest rate was 6-ish, 1979.
          It was also a USDA dept low income property that needed repairs.
          Those 5+ years I spent in the military really paid off.
          But those years were pretty tough.

          • My first home was in 1985 at an 11% mortgage. I felt lucky because they were just previously 13%; they weren’t handed out to anybody back then. They wanted money down, good credit, good job, the ability to pay back the loan. Then came, “everyone is entitled to a home” regardless if they are financially undisciplined or underemployed and Uncle Sam backs it up. Bingo “The Big Short”.

        • Our 1st mortgage was 11.25 % in the early 80s, not what is going on now. We’ve been fortunate, our present home is pd off and no other debt. I’m 73 and on SS so I’m worried about the future of SS.

      6. Looking at all of this the US and by default the citizenry has lived a higher standard of living relevant to US productivity because of a system that is inherently dishonest. The US prints money that the world accepts at value that is continuously being diluted and having little to no choice in doing so due to both strong arm tactics both economic and forceful. That “forceful” manifests itself in both covert regime change and visits from the US military with resulting US casualties. We’re in effect stuck by being fed by gangsters. Remove them and the standard of living drops like a rock when we’re forced to live within our real means with the resulting social chaos. I believe that what we have isn’t sustainable and increasing cracks in the empire are showing it. The moral cannot support its continuance, the sane cannot champion its demise.

      7. Current and near term interest on the debt is and always has been manageable. $393B int on debt for 2019 is very small compared to revenues.

        I’ve seen projections out to year 2100 and the interest on the debt is manageable., with some estimating the national debt to exceed $100T. As long as the interest payments are less than revenues the USA will continue, and the Nellie’s on this webpage will never get their collapse.

        Wild cards: end of cheap oil, pandemic, WWIII.

        It’s not the total debt that is of concern, it is the ability to make the payments on the interest. The amount the gov collects as revenues will increase along with the GDP. The GDP will expand along with the waist sizes of the typical obese American, that isn’t going to stop.

        • Bert

          You left out the USD losing reserve currency status in increments lowering the dilution pool.

      8. U.S. (odious) Debt Could Be 2,000% Of GDP: A $400 Trillion (rhetorical) Nightmare (on paper)

        Except, infrastructure and natural resources have been pledged as collateral.

        Art of the (entangling alliance) deal.

        Both parties throw away food, water, jobs, and tell you there is not enough to go around for the Americans who belong here.

      9. Does not matter, NONE of it is going to be repaid anyway. What you get back at maturity will buy you a Big Mac – IF you are lucky!

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