National Debt Officially Over $10 Trillion

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Well, we've finally done it.

The national debt, which stood at just $5.73 trillion when Bush took office in January of 2001, is now more than $10 trillion.

This is a stunning 75% increase just since the day Bush became the first President ever to forgo the traditional walk to the podium, preferring to ride in his armored car (perhaps the object-throwing crowds had something to do with that).

Think about this increase for a minute.

By the time Bush leaves, it could easily amount to a perfect doubling of the national debt in the span of only eight years.

To those who now want to rescue the credit markets so we can "get back to how things were" are failing to observe that "how things were" was, most recently, not at all how things used to be.

There's nothing to return to. A nation that doubles its debts every eight years does not really exist. It is an illusion built on borrowing. There's no way to "get back to that," because it was just a crazy party, thrown at great expense. But now the rugs are stained, the lamps are broken, and booze is all gone.

Here's what it looks like from a historical view. Bush's legacy (which is really the legacy of everybody in DC; I do not mean to pick on him alone) is circled in a color I like to call "rug stain yellow."

 

 

All of these wild attempts to "stabilize the markets" with a big government borrowing binge are most certainly destined to be ill-fated.

The only realistic way out of this, from a banking system and government standpoint, is to print, print, print.

There is almost no doubt left in my mind that the printing process is either already humming along in the background, or soon to begin.

Oh, by the way? My mother-in-law reports that today that she went to take cash out of the bank, but greeting her at the door was a hand-taped sign stating that customers are now limited to $1000 cash per day.

Gold and silver were hit again today in the lightly traded access (paper) markets, but good luck finding any physical to buy. It's not impossible, by any stretch, but it's a lot harder than it was last week, and that was harder than last month. The trend tells the tale.

Congratulations, America, you are now officially a $10 trillion debtor nation. Break out the party hats.

This is a companion discussion topic for the original entry at https://peakprosperity.com/national-debt-officially-over-10-trillion-2/

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WOW!

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before the price goes up

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So we can expect to see 20 trillion by 2012!! Laughing

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Maybee a stupid question… why not measure the National Debt as a fraction/percentage of GDP?

That will give us another perspective.

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Even more than this frightens me, it leaves me feeling very sad for the children of this nation.

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Are we talking about the same GDP that’s 2/3 consumer spending?! You want to talk about the current account deficit?

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I fully agree with backslash.

US is actually famous for having a small national debt (compared to GDP).

Was having lunch with a boss of a major bank the other day, and he told me that the US currently lownational debt is the only thing that is making this bailout possible. Quote "It will be expensive, but they can afford it".

I’m not saying he can’t be wrong, but these things have worked in the past, and the fact of the matter is simply that the US debt is not outrageous, but rather conservative. Although, that is changing I suppose…

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Do remember, that most countries that have collapsed economically also had a significantly large illusionary GDP. :wink:

–

Steve

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First let me start by saying the "rescue" American "buy in" will pass…as we all know. I may be buying calls on dow spiders before the end of the day today or Friday-b/c i missed the boat thursday…the senate passing may create a wave i want to ride until friday or monday…???

Re: FDIC increase—WHO CARES!!! If/When the banking system fails they couldn’t cover $1,000 per depositor…so why not increase to $250K to create illusion of confidence. My goodness if Wamu alone went under the FDIC could barley cover those deposits insured—what if the "greater depression"comes—???.

Can you say dow 13K by Jan. 09 or Dow 15K by May 09…I know its almost unthinkable…but what they are fabricating WILL WORK to some degree and for a LIMITED period…as Chris has said "the party on wall street goes on"…and…we MAY be ready to see the PARTY of all PARTIES…we all know where the DOW "SHOULD" be…that we are in a serious recession NOW…but nothing NORMAL seems to matter.

Chris–Unsolicited advice–with all due respect–if I may—

First-you are a most trusted and honest economic commentator…!

When you opened this "forum" I could only have flash backs of ALL the garbage I have seen on messgae boards…I am SURE your intentions were/are nothing but positive-----for the greater good etc etc etc…

However–I guess I have a few thoughts…

1—when you give everyone access to YOUR web site forum…your entire vision…intellegence–direction etc etc gets diluted…to a degree and as you may have seen…and only the beginning ( message board comment earlier ) this is ONLY the beginning—more nuts--------jackasssssss–and CHallengers to come…

2—I want Chris Martenson focusing on — the several reports out today…the indicators…the charts…the world economy…analyzing data…checking history and applying it to todays circumstances…finishing chapter 20…not spending time to the " I don’t agree with you" "answer this challenge" or "I dont understand" whiner ( when you’ve signed up for 3 days ( unpaid–thank you ) you may not totally understand–look listen—evaluate etc etc …your NOT going to be 100% correct…you and I both know that…

3—Im finding ChrisMarteson.com…a lot less of Chris Martenson than I would like and I lot more of what I don’t want or need…

JMHO

Thanks for all your hard work and giudence Chris!!!

JDB

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[quote=cmartenson]All of these wild attempts to "stabilize the markets" with a big government borrowing binge are most certainly destined to be ill-fated.
[/quote]
Could it be that the collapse "despite all the best efforts of the government and the industry" are really meant to fail after all? Has it occurred to anyone that the crazy North American Union thing that Bush signed (without any input from the rest of the electorate I might add) might be right on track? That the ultimate relief to this great financial breakdown might be the NEED to switch to something else - The Amero?
Why not? We as a nation are, quite frankly, way too easy to fool.

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…then we add the unfunded liabilities and get something like 60-100 TRILLION. Starting to add up to real money.

My guess: Fed will continue to monetize the debt increases as foreigners slow their buying. Hyper-inflation is on the way.

b

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I agree with jdb.

I would like to see a little more Chris in PeakProsperity.com.

Thank you for all of your work, I have been reading faithfully for sometime now.

GO

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exactly - yet when I talk to my generation they think it will be just like it was in the last world war. A bit of a struggle but we’ll pull through. Mostly its the young who know the rotten real deal.

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Any comments on this (maybe crazy) idea?

  1. SOMEBODY (a government agency?) ends up owning millions of foreclosed houses and other real estate.
  2. China continues to sell to us on credit (ala Walmart) for a while.
  3. Baby-boom retirement and declining demographic pressures continue to drag down housing values.
  4. SOMEBODY gets the great idea to start selling these properties to China, either to reduce the debt or to simply continue with our phony "real estate economy."
  5. Wealthy Chinese are "allowed" to settle in the US - several million of them.
  6. The wealthy (and well educated) Chinese immigrants end up with all of the best assets in the country.
  7. China ends up as the only world superpower, with the US being essentially a colony.
    What else could motivate China to lock its currency in a death grip to the US currency?
    The US is in the Middle East because of oil.
    China will be over here because of their population pressures, and the fact that they have just about "used up" their country (after 4000 years of continuous use). We have a nice, "new" country ready for the taking, by way of globalization and "free trade."
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Two things about the ‘argument’ that the US has plenty of borrowing power because "we haven’t gone as far as other countries yet".

 

  1. How much do you trust our GDP measures? As I show in Fuzzy Numbers the US GDP measure is heavily larded with various suspect non-cash additives such as "the value of free checking" and "the value of not paying yourself rent". When we strip out these items, plus hedonics, to put ourselves on an apples to apples comparison with ourselves in the past and other countries today, we find that our debt-to-GDP vaults by a factor of nearly 50%. Now instead of a pleasing 70% number we get something closer to 125%. How does this feel? Different?

  2. The debt-to-GDP is actually only federal debt to GDP. That is a red herring. More important is the total debt of the country because that is actually the debt we are collectively on the hook for, not just the federal debt. Think about it, why should we only track and obsess over the federal debt component only? What about your local muni debt? Does that count in your life? Sure it does. What about your state debt? Yep, that too. What about your personal debt? OK, I guess that too. What about the corporation you might work for - does it matter to you if they hold debt or not? It should, because it will only be through your efforts that it gets paid off eventually.

In short, when someone says "but debt-to-GDP is historically low" they are dodging the issue in a couple of important ways.

Deficits (and debts) do matter.

Best,
Chris

 

 

 

 

 

 

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I also agree with JDB. Well stated.

Towards that end - a few usability suggestions:

  • Getting RSS up and going would save a lot of page reloads to see if there’s anything new.

  • I want to easily know/see which comments are from Chris. A list on the left, just like recent comments, but only recent comments from Chris would do the trick.

  • I like being able to see what new comments were posted, but end up doing a lot extra clicking b/c it doesn’t say which topic they’re in so I don’t know whether I’ve already read them. Lately I’ve resorted to looking at the status bar on the mouse over to identify the topic. It’d be helpful to have the topic listed underneath along with how long ago it was posted. Alternately you could display comments sorted by topic rather than by time posted.

  • As commenting increases, it may become helpful to have a way for readers to very simply vote whether a post is useful. Posts voted not helpful are ‘collapsed’ - they’re still there but you have to click to expand/read them. See digg.com for an example.
    Thanks, Chris!

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That equates to about 27.4 Billion more debt per day currently, and increasing exponentially.

(10,000 B/365 + 000,000,000 = $ 27,400,000,000 per day)

Yell OUCH!

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Another report from the precious metals front:
A friend who has been involved in the gold & silver market for years now said he recently went to his favorite bullion dealer in Vancouver. The dealer did have a very small amount of junk silver left; however, he said that not only is supply tight on the retail side, but he is also getting almost daily calls from silver refiners who service the industrial sector with offers to buy any silver he has. This would seem to indicate that the shortage goes beyond retail and includes industrial/wholesale as well. Translation: get it while you can, if you can.

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Dear Chris,

Two nights ago I was talking with a friend who has also been a close follower of you and your web sites since 2005—as have I—and we found we both had noticed that something has changed about the site. The focus seems more minute-to-minute, less academic, less objective, and less ‘big-picture.’ Notice I said the "feel." Perhaps the increased focus on the blog, combined with the influx of many empassioned people as the economic crisis becomes manifest has resulted in an attenuation of the detached, academic, objective work of the site. I think the public noise on the blog is scattering and diluting your message. And none of that work is archived into a useful form, so every week it is like throwing water into the sea.

Not that the blog isn’t a great place— I love it — but I think that your message is being isolated behind a curtain of noise. When an interested but neutral person comes to the site and one of the first comments on a news story that they read is "Buy a flaregun because it has almost as much knockdown at close range as a pistol and you can get around the gun license," they are guaranteed to go "WHOA! Not my cup of tea. These must be the kind of people that this site is intended for" and go back to reading investment pamphlets from Merril Lynch without ever reading your own careful analyses and taking the crash course, all of which is very high quality work. If it should ever become impossible for you to respond to a high percentage of commenters on the main forum personally (say, because you’re spending more time on an “inner forum”) this effect will be intensified, and the site will begin to appear to the first-time visitor as more of a "club" which will not win minds, but merely become a congregation spot for like-minded people, like all of the hundreds of other economic and peak oil blogs/discussion boards.

The are plenty of doomer/peak oil/economic collapse/survivalist/gold bug discussion sites out there, and they are very popular. Intelligent people post there and have many interesting discussions. I’m sure you could just be one of these and have a great following. It would be easy. But this isn’t just a doomer/peak oil/economic collapse/survivalist/gold bug discussion site, as stereotyped, and that image must be clearly projected: a beacon of reason and big-picture thinking. Many sites just become banter among like-minded people, and do not often win over new people who will then be able to convince other thinking people. In order to have the best chance of conveying your message, your best work (i.e., crash course and other articles) should dominate. More Chris. Less noise. Just my 2 cents.