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September 30, 2012 US Debt-To-GDP: 102.4%

Tyler Durden's picture


The government may have been instrumental to the US economy growing in the third quarter (did we say may: generating over 30% of the annualized 2.0% "growth" in Q3 probably qualifies as was absolutely instrumental in this impartial, apolitical datapoint), but the bottom line is that there was a cost. There is always cost. And a number: the number is $15.776 trillion, which was the absolute GDP number as of September 30, 2012 (to be revised lower in one month). This means we can now calculate what total US Debt-GDP was as of 3 weeks ago. And with the DTS reporting that debt was $16.16 trillion as of the day the third quarter ended (net of the SSN funding adjustment, which of course is always reported the first day of the next quarter for window dressing purposes), it means that total US Debt-to-GDP was 102.4%. And obviously rising much faster as since the Second Great Depression it takes well over $2 in debt for every $1 increase in GDP. Because there never is such a thing as a free lunch, especially when the government is operating the soup kitchens...


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Fri, 10/26/2012 - 11:14 | Link to Comment nope-1004
nope-1004's picture

The trend is your friend, as we all keep embracing money destruction.


Fri, 10/26/2012 - 11:17 | Link to Comment Peter Pan
Peter Pan's picture

All trends and graphs eventually come to an end. So too will the current level of debt, deficit spending, QE and other unsustinable strategies.

Fri, 10/26/2012 - 11:39 | Link to Comment Dr Paul Krugman
Dr Paul Krugman's picture

Without the government spending GDP would have been worse. If we had more government spending it would be better.

What is wrong with government spending?  It creates jobs, gives people a cushion during these hard times (with food stamps etc), and spurs future demand by promoting growth now.

Considering the Federal Reserve did next to nothing last year to help the economy, I think this number is decent; what will be important going forward is that we stimulate the economy further to make progress on our endeavors.

The debt ratio may look scary to the uninformed, but this will be paid back in the future when our economy has found traction.  Have we found traction yet?  No.  So until then we must support our fellow Americans.

Fri, 10/26/2012 - 11:40 | Link to Comment Chump
Chump's picture

I hope against hope that you are the real Krugman.  Go die in a fire.

Fri, 10/26/2012 - 11:47 | Link to Comment economics9698
economics9698's picture

Dr. Krugman, the problem with government spending and stimulus is the money comes from printing, borrowing, or taxes.  Moving money from the right pocket to the left pocket and the government taking a cut is 4th grade economics aka Tony Soprano Mafia economics.



Kind of like stealing parents money from them and brainwashing their kids in government schools that government is good.  Pretty good work if you can get it.


Fri, 10/26/2012 - 11:45 | Link to Comment economics9698
economics9698's picture

Once the debt get over 120% of GDP bend the fuck over.



Fri, 10/26/2012 - 12:17 | Link to Comment RockyRacoon
RockyRacoon's picture

The various State's deficits add up to a tad over $4.25T.   That's about a quarter of the National Debt -- on TOP of the National debt.

The prediction my Ms. Whitney ain't too far off in the future.  It's already in the making.

Fri, 10/26/2012 - 11:47 | Link to Comment Zap Powerz
Zap Powerz's picture

Why cant the federal government just give every citizen a billion dollars to go spend?  Would that not stimulate the economy?  Please tell me where this plan would fail.

Fri, 10/26/2012 - 11:56 | Link to Comment economics9698
economics9698's picture

It would be a winner!!!! /sarc

Fri, 10/26/2012 - 12:23 | Link to Comment RockyRacoon
RockyRacoon's picture

Oh, but there's that pesky "Moral Hazard" thing to worry about.   Worry when it applies to the general citizenry, not to big financial institutions, of course.   Hell, the money printers couldn't even apply some monetary salve to the festering housing wound without a handful of folks here at our beloved ZH whining about "bailing out" those who entered into an adhesion contract with unscrupulous lenders.   A no-win situation it seems.   The moral horse has bolted from the barn.

Fri, 10/26/2012 - 11:59 | Link to Comment knukles
knukles's picture

So you're now in the camp with Reaganomics... spending now will goose the economy for later and the debt will pay off itself after the economy improves with tax revenues lifting.


You and Reaganomics... all for Big Government


PS.  Tyler, you should feel honored that the Good Doctor believes ZH worthy of his time and effort, attempting to convert the non-believers to his dogma in an effort for economic salvation (aka religion)

Fri, 10/26/2012 - 11:57 | Link to Comment SelfGov
SelfGov's picture

MDB is responsible for at least one of your up-votes for sure!

Fri, 10/26/2012 - 11:58 | Link to Comment knukles
knukles's picture

Betcha he greenied himself....

Fri, 10/26/2012 - 17:32 | Link to Comment reTARD
reTARD's picture

Congratulations Paul Krugman.

Condolences citizens (living and unborn) ultimately responsible for all the debts and promises to pay.

"This note is legal tender for all debts, public and private." In the NWO we trust.

Fri, 10/26/2012 - 11:15 | Link to Comment SheepDog-One
SheepDog-One's picture

Well...thats certainly got to be better than expected or beat expectations or something.

P.S.- Thank the Gods or whoever that this constant state of suspension of disbelief 'all fakery and polished turds for the all-important elections' crap is only a few more days.

Fri, 10/26/2012 - 11:20 | Link to Comment Zap Powerz
Zap Powerz's picture

A-fucking-men brother!

X-mas this year is going to be epic!

One thing I have recently decided to add to my food storage: popcorn. lots and lots of popcorn.

Fri, 10/26/2012 - 11:13 | Link to Comment Vincent Vega
Vincent Vega's picture

Can't the governmant just print some money to pay down the debt? Problem solved, viola!  <sarc>

Fri, 10/26/2012 - 11:50 | Link to Comment economics9698
economics9698's picture

Yes they can!

Fri, 10/26/2012 - 11:14 | Link to Comment Conrad Murray
Conrad Murray's picture

Doin a heckuva job, Brownie!

Your father looks up from the pits of hell(probably still a bit injured from all the drunk driving accidents) with great admiration as you fulfill his dream to destroy the Colonialist power he and you so despise.

Fri, 10/26/2012 - 11:24 | Link to Comment Zap Powerz
Zap Powerz's picture

The cream will always rise to the top.

He may destroy what better men have built, but better men will just rebuild it again. They always do.

And the parasites will always be there to destroy.

Its entropy my friend and it takes supermen to keep the whole thing from falling apart.  Sometimes entropy wins. (actually, eventually, entropy always wins :(  )

Fri, 10/26/2012 - 11:33 | Link to Comment sdmjake
sdmjake's picture

Them laws of thermodynamics is a bitch ain't they??

Fri, 10/26/2012 - 11:49 | Link to Comment economics9698
economics9698's picture

PV = nRT

Fri, 10/26/2012 - 11:19 | Link to Comment Dr. Engali
Dr. Engali's picture

I feel you feel wealthy? Screw you Bernank!

Fri, 10/26/2012 - 11:19 | Link to Comment Conman
Conman's picture

So red line going from lower left to upper right means buy ES? Ok done.

Fri, 10/26/2012 - 11:20 | Link to Comment Bubble
Bubble's picture

gov generated GDP that the mkt celebrates. I'm getting bored of this sh1t.


 Talk of a ban on gold ownership in the Eurozone! Now that's a big deal.

Fri, 10/26/2012 - 11:24 | Link to Comment DUNTHAT
DUNTHAT's picture

This weeks GOLD COT report ----

Watch the Smart Money, that will be the tip off !!

Updates Sat Morning

Fri, 10/26/2012 - 11:22 | Link to Comment kralizec
kralizec's picture

Winning, Obama-style. 

Fri, 10/26/2012 - 11:23 | Link to Comment mktsrmanipulated
mktsrmanipulated's picture

in jan 2008 fed balance sheet was $925 billion august 2012 2.8 trillion more than tripled and the economy hasnt gotten better what next BEN pee on my leg and tell me its raining

Fri, 10/26/2012 - 14:54 | Link to Comment Angry White Dude
Angry White Dude's picture

Leeeerooooooy Jenkins!

Fri, 10/26/2012 - 11:23 | Link to Comment Cone of Uncertainty
Cone of Uncertainty's picture

This is to my overlords:


........('(...´...´.... ¯~/'...')
..........''...\.......... _.·´

Fri, 10/26/2012 - 11:27 | Link to Comment Zap Powerz
Zap Powerz's picture

Hey, we had a good run right?  200 plus years is not a bad run at all.  Sure, the Romans did better, but they didnt have the interwebs and the Fed to speed up their destruction.

I look forward to the New America that will be born out of this shit pile we have for a country right now.

Got to stay optimistic my friends!

Fri, 10/26/2012 - 11:27 | Link to Comment csmith
csmith's picture

Debt = GDP now makes the math REALLY easy (even for Joe Biden).

Any interest rate on Federal debt greater than GDP growth is another step toward bankruptcy.

Fri, 10/26/2012 - 11:28 | Link to Comment Yen Cross
Yen Cross's picture

This shit makes my stomach turn. We should replace the Bald Eagle , with a Banana Peel On "The Great Seal ".

Fri, 10/26/2012 - 11:31 | Link to Comment unclebill
unclebill's picture

are you telling me that soon we are going to wipe our asses with $100 bills

Fri, 10/26/2012 - 11:31 | Link to Comment mick68
mick68's picture


Fri, 10/26/2012 - 11:40 | Link to Comment XitSam
Fri, 10/26/2012 - 11:36 | Link to Comment Jim in MN
Jim in MN's picture

OT but interesting--Chinese dissident Ai Weiwei interviews one of the Chinese government's paid Internet trolls.


Below is the transcript of Ai’s interview with an online commentator. As requested, an iPad was given as compensation for the interview. To protect the interviewee, relevant personal information has been concealed in this script.

Fri, 10/26/2012 - 11:54 | Link to Comment fuu
fuu's picture

I agree that it is interesting.

Fri, 10/26/2012 - 12:00 | Link to Comment magpie
magpie's picture

All your citizenisms are belong to us

Fri, 10/26/2012 - 14:31 | Link to Comment Bubble
Bubble's picture

Maybe the interviewee is the Chinese winston smith at minitrue, or maybe he's not Chinese at all. Maybe he's a double-troll, posing as a troll!

Fri, 10/26/2012 - 11:43 | Link to Comment Hannibal
Hannibal's picture

Hint, hint... AG Eric Holder: Ex-premier SIlvio Berlusconi, sentenced to 4 years prison term for money laundering and tax fraud.


Fri, 10/26/2012 - 11:46 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture



I understand Tyler's job is to report how many gallons of water Titanic is taking on, but it sorta looses meaning when 2/3 of the ship is under water.

Oh look, the tail broke off and settled upright!  We're gonna be safe after all!


Fri, 10/26/2012 - 11:49 | Link to Comment Zap Powerz
Zap Powerz's picture

Right now we are deciding who will be a better captain on that ship you describe.

Fri, 10/26/2012 - 11:51 | Link to Comment IridiumRebel
IridiumRebel's picture

You gotta beat people over the head with the truth sometimes. 

Fri, 10/26/2012 - 11:52 | Link to Comment Yen Cross
Yen Cross's picture

 The sternTails are on planes, and the "Federal Reserve Chairman".

Fri, 10/26/2012 - 12:08 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture



When it sinks, it won't matter what anyone called it.

Fri, 10/26/2012 - 12:55 | Link to Comment Yen Cross
Yen Cross's picture

So true.

Fri, 10/26/2012 - 12:02 | Link to Comment Taffy Lewis
Taffy Lewis's picture

I will be reusing this in the future:

"there never is such a thing as a free lunch, especially when the government is operating the soup kitchens".


Fri, 10/26/2012 - 12:04 | Link to Comment fresno dan
fresno dan's picture

Although at one time we were rich enough that I would have agreed with Dr. Krugman, we no longer are. 

A good deal of the "spending" was to prop up (TARP) bankers who did not know what they were doing, as well as being criminal.  This misallocation of resources managed to turn the "money multiplier" negative - you CAN shovel money down a rathole, and you will be POORER.  We continue to prop up house prices to prop up banks.  The problem of course, is that a considerable number of people do not have the income to support the housing prices that support the banks.  30 years of irrefutable data show that most people are getting poorer.


what Dr. Krugman fails to realize is that not all products are created equal - no inflation in flat screen TVs, but inflation in food, electricity, health care, gasoline.  Also, growth has occured over the years due to cheap and plentiful oil.  Oil is goning to be consideraly more expensive, and therefore discretionary income will decrease.  Dr. Krugman's view of endless growth is going to hit a brick wall.

Fri, 10/26/2012 - 12:19 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture



Why do people try to make sense out of cover stories for looting sprees?

They're just cover stories for pete's sake.

Fri, 10/26/2012 - 12:07 | Link to Comment lolmao500
lolmao500's picture

Well from the depth of Great Depression 2.0 ... the US has created about 5.2 million jobs at a cost of about $8.9 trillion.

Very bullish.

Fri, 10/26/2012 - 13:26 | Link to Comment JamesBond
JamesBond's picture

9/30/2012 -  the day the line in the sand was crossed.



Fri, 10/26/2012 - 13:37 | Link to Comment Aegelis
Aegelis's picture

Let's move away without giving a forwarding address before our kids and grandkids find out.

Fri, 10/26/2012 - 16:53 | Link to Comment davidhur
davidhur's picture

Shouldn't the debt to GDP ratio be 141% not about 103%? That's with the about $6 trillion of Fannie Mae and Freddie Mac debt to the Treasury included since it's an indirect obligation of the US gov't.

Sat, 10/27/2012 - 08:45 | Link to Comment EZYJET PILOT
EZYJET PILOT's picture

I doubt that is the real Krugman responding in the comments above but if it is what a load of bollox. Deficit spending has worked so well for Spain, Ireland, Greece, UK, Portugal, hasn't it? I can't believe the level of brainwashing amongst Keysianist economists. The Fed has continaully been monetising the debt of the US, it never paused last year, it's a great big sausage factory with the primary benefactor beng the corrupt banksters, borrowing at zero percent to then flip the bonds back to the Fed. This then leads to inflation as we all know and this is primarily the reason for the positive GDP figures.

He talks about government spending being a good thing but we all know this is also notoriously inefficient, what is productive in keeping people dependent on food stamps, what is productive in fighting countless wars across the planet? These things all contribute to the official manipulated GDP but this figure is nothing more than an illusion, it means nothing! No good will ever come from government spending money, we are still losing jobs but supressing the truth in line with the election propoganda. The part time slave work forces have increased beyond all imagination which has been covered to death by ZH.

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