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This Time Next US Presidential Campaign: $24.1 Trillion In Debt, 138.9% Debt/GDP

Tyler Durden's picture




 

While Obama may or may not be on the way to winning his reelection, courtesy of a GOP field that is, to say the least, limited, and where the only worthy candidate is more ostracized by the right than even anyone on the left, the bottom line is that whoever wins the presidency, it will matter precisely didley squat. As the US debt clock shows, fast forwarding 4 years, or to February 2016, when the next presidential race will be in its final stretch, America will have $24.1 trillion in debt, about $9 trillion more than it does, now on $17.4 trillion in GDP, for a gross debt to GDP ratio of 138.9% (and Apple's $1 trillion market cap will account for 150% of the Nasdaq... just as IBM is 125% of the DJIA). Needless to say, it will be long past game over at that point confirming that the current presidential race, with its exciting tangential detours into female fertility, moon bases, LBO IRR maximization courtesy of cost-cutting, is completely and utterly meaningless. Also, keep in mind, "at current rates" for an endspiel that has now entered the exponential phase in virtually every category, is to say the least, optimistic. Yes, interest rates may be negative in 2016, but that means that the liquidity trap endgame has not only begun, but is well on its way to ending, and mercifully putting an end to this whole Keynesian "sustainability" charade. Remember: Japan's debt-deflation lasted for 30 years only thanks to new pockets of incremental global leverage and inflation: China and the PIIGS. This time, absent the levering of the entire continent of Africa, there is noone who can take the releverage baton and run. Which means the only "buyers" will be the central banks. At least back in the day, Weimar just one nation. This time, it will be the "Weimar World."

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Sat, 02/11/2012 - 13:21 | 2149289 goldencross10
goldencross10's picture

Anyone investing in Xerox or Lexmark for record profits from now till then by the amount of toners they will sell to the US Govt to print all of this money? Souns like a good idea to me.

Sat, 02/11/2012 - 13:29 | 2149310 vast-dom
vast-dom's picture

i believe the calcs for this estimated debt/gdp ratio to be conservative; we are not accounting for inflation (oil/food/etc), market crashes, ZIRP fuckery rejiggered and failed QE, etc. etc. etc.

Sat, 02/11/2012 - 13:37 | 2149340 dwdollar
dwdollar's picture

Yeah really... This is optimistic to say the least.

Sat, 02/11/2012 - 14:18 | 2149414 TruthInSunshine
TruthInSunshine's picture

There will be 314 million Americans in 2016, approximately.

There will be 152 million employed Americans (give or take 5%).

There will be 75 million Americans who pay net taxes of +1 USD or more.

If David M. Walker is correct (and he's the former Chief Accountant of the U.S.) the real debt will be 79 trillion USD, as it's just under 60 trillion USD now.

If Larry Kotliloff is correct (former economic advisor to Reagan) the real debt will be 276 trillion USD, as it's just over 200 trillion USD now (1.38 times 200 trillion = 276 trillion USD).

 

So, let's use Walker's more conservative figure as to what the true national debt will be, or 79 trillion USD, based on 1.38 times 58 trillion:

79 trillion USD divided by 314 million Americans = $251,192.357 USD per American (newborns to centurians).

But, only 75 million Americans will be employed and pay net tax, so this is the relevant number.

79 trillion divided by 75 million American workers who paying net taxes = $1,053,333.33 USD per American Taxpayer

So, in 2016, the national debt might be manageable if US GDP grows 50% each year in each of the next consecutive 4 years (i.e. US GDP would = 110 trillion USD by 2016).

2012 US GDP would = 22 trillion USD

2013 US GDP would = 33 trillion USD

2014 US GDP would = 49 trillion USD

2015 US GDP would = 73.5 trillion USD

2016 US GDP would = 110 trillion USD

I think this is very doable.

Get crackin'.

 

p.s. - The Bernank or whomever the esteemed Fed Chairman would be would have to manage inflation at this growth rate (hypotehtically insane that it is) so that there's not hyperinflationary collapse. A minor detail.

Sat, 02/11/2012 - 14:22 | 2149439 whstlblwr
whstlblwr's picture

At least if RP elected we'd reverse course. Now the corporate conseratives favorite dirty word is "libertarian" afraid they will lose their control and money from their overlords. Santorum is sucking their dicks in Texas now.

Time for a new media station that gives us news of freedom and truth. To pull in older supporters who miss message from internet, a new station that won't cancel shows for mentioning RP support.

Sat, 02/11/2012 - 14:27 | 2149445 The Alarmist
The Alarmist's picture

No, Dammit ... this time is different!  You just gotta have more hope!

Sat, 02/11/2012 - 15:31 | 2149447 whstlblwr
whstlblwr's picture

Not hope, work harder to stop them.

Need a news station who will report so all can see fraud in the GOP party. Show all that the GOP change caucus dates and times in Maine to confuse voters and they tell organizers to make sure not to chose delgates who are under 40 to weed out RP supporters.

In fact, why the hell aren't the unemployed who care about this country doing independent news stories on fraud in this election, then posting to the internet. Even sting operations. Why are we letting them commit election fraud?

We need on the ground reporters who will show us the strong RP support and the measly support for Santorum, Romney. Notice how CSPAN doesn't cover the primary race anymore, or other news station don't show us on the ground support. Only time CNN showed us is when they thought it was a Gingrich shoe in and instead the whole caucus in Nevada was not for Gingrich, but was a RP love fest. How come we didn't see news story of on the ground support in MN, MO, or CO?

They are stealing the election from us and we are letting them.

Sat, 02/11/2012 - 16:54 | 2149664 TruthInSunshine
TruthInSunshine's picture

Every realist with an IQ above 100 (even 85) knows that the debt is unpayable unless: a) dollars are devalued by another 75% over the short term (not too short, though, as frogs will leap from water heated too quickly; 7-10 years is a decent guestimate), or b) we literally turn Japanese, and The Bernank and his successor get Americans to buy treasuries bearing highly negative real yields in large quantities and for a long period of time, or c) both of a & b.

The problem with this solution (option c) is that even it has a finite window of effectiveness, as it leads to fundamental economic collapse (diminishing incremental returns on investment of capital, ultimately turning into negative returns, will act as the ultimate disincentive for producers and suppliers of goods and services to produce and supply).

The U.S. economy can't grow itself out of this crisis, it can't borrow itself out this crisis (that's a myth applicable to any nation at any point in history), and unless someone believes the U.S. will formally default on its debt (or interest payments on its debt), the only mathematically possible way to keep kicking the can is to print a mind boggling number of Federal Reserve Notes & to engineer a scenario where many, many people are still willing to conduct commerce with FRNs and hold FRN, negative real yiled bearing FRN demoninated government bonds.

Now that we've covered that, let's talk about the really bad news...

On second thought, screw it, let's just have the government hire everyone, resulting in a true banana republic, bound to collapse within 5 or 10 years, or start WWIII.

Look! Over there! It's an Iranian/Chinese/Russian <insert randomly selected allegedly threatening thing that is of Iranian/Chinese/Russian origin here>.

 

p.s. - The truth is that The Money Masters are playing the ultimate fiat inflation-deflation stategy to control the global economic Ponzi as evidenced by the most indebted nation on earth as measured by most metrics (i.e. Japan), which has increased its fiat supply by an astounding amount over the last 30 years on a relative basis, having a fiat currency that has appreciated rapidly and strongly against nations having fiat currencies that have decreased in supply compared to the yen on a relative basis.

"Let me issue and control a Nation's money and I care not who makes its laws, bitchez."

-- Uber-Saint Lord Mayer Amschel Rothschild

Sat, 02/11/2012 - 16:57 | 2149684 palmereldritch
Sat, 02/11/2012 - 17:02 | 2149698 sitenine
sitenine's picture

We, the people, need Ron Paul.

If you still have any questions as to why, please view this Alex Jones interview:

"Entering into The Age of Darkness With Dr. Francis Boyle"

http://www.infowars.com/entering-into-the-age-of-darkness-with-dr-franci...

Sat, 02/11/2012 - 17:27 | 2149719 trav7777
trav7777's picture

did TD do a logarithmic chart or is this linear debt?  The debt is growing at 9% per year or so.

Sat, 02/11/2012 - 19:03 | 2149748 TruthInSunshine
TruthInSunshine's picture

You're correct. 9% sounds so benign, but wow, when one breaks it down, it means almost a doubling every 5 years:

 

U.S. National Debt (officially - a joke, I know) was 9.4 trillion when Obama took office, and will be 16.7 trillion for fiscal year 2012 (officially) - http://www.usgovernmentspending.com/federal_debt

16.7 trillion minus 9.4 trillion = 7.3 trillion

That's a 44% increase in 5 years (based on through the end of FY 2012), or put another way, nearly a doubling of the debt (by official figures).

44% divided by 5 = 8.8%

 

Of course, the real debt is at minimum 58 trillion, and as much as 202 trillion, based on the estimates (even though they're widely varying; more on that in the links that follow) of two absolutely credible sources, David M. Walker & Laurence Kotlikoff, so it's all moot anyways:

Sat, 02/11/2012 - 21:09 | 2149959 FrankDrakman
FrankDrakman's picture

Judging by your arithmetic, you must have gone to an American school.

Starting debt: $9.4 trillion

Ending debt:  $16.7 trillion

Difference: $7.3 trillion

% increase: 7.3/9.4 = 77%, not 44% (where did you get that?!)

to get compounded interest rates, you don't just divide by the number of years; you need to take roots using that number of years

Fifth root of 77% is 12%, not 8.8% (i.e 1.12^5=1.77)

I'm not disagreeing with your thesis, mind you, just that the figures you use to support them are not calculated according to the laws of the known universe. You might want to google the "Rule of 70" to get a better handle on figuring this stuff out in your head.

Sat, 02/11/2012 - 23:28 | 2150122 TruthInSunshine
TruthInSunshine's picture

It's even worse than I thought. 77%???!!!!

Thanks for cleaning up my errors.

These revised, accurate figures have officially blown my prior optimism America's debt crisis could be resolved.

p.s. - I was highly distracted and multi-tasking when I posted those flawed calculations, but that's just a lame excuse to try and mitigate my embarassment. And Trav's 9% number screwed me up (It's Trav's fault, actually).

Sat, 02/11/2012 - 23:32 | 2150157 FrankDrakman
FrankDrakman's picture

No worries, mate. I'm only here to help.

And I think it's all Trav's fault too :}

Sun, 02/12/2012 - 00:05 | 2150192 TruthInSunshine
TruthInSunshine's picture

I forgot the most important excuse of all:  It was being reported by the Main Stream Media (the critical informational institution that Americans depend on to determine their future course) that Whitney Houston had died (with blanket coverage that surpassed all matters regarding our deficit spending, national debt, NDAA 2012 passage that undermines constitutional guarantees, many-trillion USD wars in Iraq, Afghanistan & Iran soon that are helping to bankrupt us, the co-opting/Deep Capture of our legislative, executive and even judicial branches of government by multinational corporate and foreign interest groups, the fraudclosure settlement that undermines constitutional guarantees, unemployment crisis, labor participation rate, SNAP and other government assistance reliance, crumbling of our public infrastructure, precarious financial state of health of our states, counties and cities, and many other less important 'issues' than Whitney Houston's death, in the aggregate).

But it's still Trav's fault, mainly.

Sun, 02/12/2012 - 00:18 | 2150212 economics1996
economics1996's picture

The federal, state, and local debt is 121%.  Total debt is 370% Suicide is 250%.  Bernanke is juggling 8 plates right now.  How long?  He's a good juggler.

Sun, 02/12/2012 - 13:19 | 2150945 FEDbuster
FEDbuster's picture

As long as the US dollar is the reserve currency backed by the US military, printing prospartity seems to work.  Once that changes and the world cuts up our credit card, then the US goes FUBAR.  The economic doomsday clock is ticking, how are you spending this time we have to prepare?

Sun, 02/12/2012 - 07:05 | 2150519 Ghordius
Ghordius's picture

+1 - the "Rule of 70" ought to be banned as a subversive mathematical mind trick ;-)

Ah, and I think it's all Trav's fault too

Sun, 02/12/2012 - 07:29 | 2150526 The Alarmist
The Alarmist's picture

It's really Whitney Houston's fault, and that plus her inside knowledge of 911 is why TPTB had her done in.

Mon, 02/13/2012 - 07:49 | 2152890 Ghordius
Ghordius's picture

can't be. Whitney Houston died, Trav is still posting. ergo trav is not Whitney

Sat, 02/11/2012 - 17:57 | 2149751 DoChenRollingBearing
DoChenRollingBearing's picture

My quick and dirty calculations show that if we start at $17 tn (or so) and grow the debt (doesn't that sound nice, like a plant or something) at 9% / year, then we do arrive at a debt of 24 tn.

I show my work:  $17 tn * 1.09 * 10.9 *1.09 * 1.09 = approx. $24 tn

Sat, 02/11/2012 - 19:01 | 2149797 Michael
Michael's picture

The Ron Paul Crew will screw over the mainstream media and the GOP by handing Obama the win. You can take that to the bank and too fucking bad FOX News crew.

Sat, 02/11/2012 - 19:26 | 2149860 whstlblwr
whstlblwr's picture

That's what they hope since they are both from the same corporatist party.

It was obvious that Romney won Maine when big mouth brunette on CNN kept repeating how important it was for RP to win Maine. The fix was in.

So lazy ass America, what are we going to do about it. Roll over and let them steal it?

Sat, 02/11/2012 - 19:53 | 2149877 Michael
Michael's picture

And since nothing will improve with whomever the PTB choses as president, Obama and the Democrats can take credit for the complete and total economic collapse of the USA. I can live with that.

Sat, 02/11/2012 - 20:33 | 2149930 whstlblwr
whstlblwr's picture

But meanwhile in your next Obama four years the status quo will rob us blind until they hold all the cards before the collapse. No lazy ass, you won't be able to live with that.

Sat, 02/11/2012 - 21:00 | 2149953 Michael
Michael's picture

400,000,000 personal firearms in the hands of civilians. I can live with that.

Sun, 02/12/2012 - 03:33 | 2150435 Don Keot
Don Keot's picture

+ many, Michael you always stay focused.

Sun, 02/12/2012 - 12:43 | 2150889 TheFourthStooge-ing
TheFourthStooge-ing's picture

whstlblwr said:

But meanwhile in your next...

...presidential administration of the winning War Party candidate (be it George W. Obama, Newt Gangrenerich, Willard "The Rat" Romney, or Frothy Santorum)...

four years the status quo will rob us blind until they hold all the cards before the collapse.

Fixed it for ya.

 

Sun, 02/12/2012 - 07:31 | 2150527 The Alarmist
The Alarmist's picture

This is why you need to get your news from the leggy blonde chicks at Fox News.

Sun, 02/12/2012 - 05:22 | 2150485 Element
Element's picture

 

I show my work:  $17 tn * 1.09 * 10.9 *1.09 * 1.09 = approx. $24 tn

 

I constructed a spreadsheet in 2008 that projected the US would reach about 22.4 trill public debt in 2020.  At that time I thought a lot about that and realised it would be a horrific catastrophe if it happened, because long before 2020 everyone on Earth would realise that there was no chance the USA was good for it.  Three years later it looks like I was optimistic.

But what really blows my mind though is that there are still people out there who think and assert the taxpayer can and should magically make it all ok again.

Because there's zero chance taxpayers are going to do any such thing so why do economists and Bankers and MSM shills keep imagining that is some sort of viable ultimate fall-back position?

We won't be accepting the 'nationalisation' of Red-Sheild's global gambling debts.

'Nationalisation' of toxic-assets is just code for stealing every last bit of wealth from every nation on earth, and leaving us with the war-torn starving husk.

I have a better idea - let's not.

Sat, 02/11/2012 - 20:41 | 2149933 francis_sawyer
francis_sawyer's picture

'logs' are for wussies... until, of course, they're not...

Sun, 02/12/2012 - 21:14 | 2150766 epwpixieq-1
epwpixieq-1's picture

For those who can understand, somehow, integrals, this shows the problem between PAYING the debt and PAYMENT of the debt:

Integral_from_1_to_0(xx)dx = some nice tricks here done by Bernoulli = 1 - 1/22 + 1/33 - 1/44 + 1/55 - . . . = 0.78343 . . .

Integral(xx)dx = does not have a closed solution (plainly said undefined or may be, just for fun, 1/(ZeroHedge))

Note the BIG difference: one of them is solvable ( think politics, economic policy, professional money distributing people taking decisions - all of them can be defined as Short Time Dependant Variables - STDV), in DEFINED "time" frame.

Without a given, a WELL DEFINED time frame, influenced/created by STDV, we have a system crash = undefined.

So this is the problem we are ALL facing.

Very few people look even 5 years ahead. Not to speak 10 - 20, forget about 50 or 100.

When one starts thinking in THAT extended time frame EVERYTHING changes.

A note aside. Tesla was one person that I know of, that has thought about what the world will be facing in the future. Of course, he was thinking about more important things than money. He was thinking about ENERGY. The underlying force for ALL living systems, economy is one example ( a human made ) of such a system.

120 years ago, Tesla was able to foresee that the MAJOR problem humanity will face in the future is SUSTAINABLE energy sources.

And here you have it in ONE word the major problem we all face, even without 99.9% of us realizing it.

If only we could start thinking in undefined than in defined integrals, using the analogy above, we could have a totally different world around us.

But, hey, human life by itself is in a defined integral. And as we all know THE HARDEST THING is to think outside of one's inherited environment.

Sun, 02/12/2012 - 21:41 | 2152222 pods
pods's picture

Had to give you a greenie for mentioning Tesla, hands down the greatest scientific mind that has lived to date.

pods

Sat, 02/11/2012 - 17:00 | 2149696 Archon7
Archon7's picture

Takes away his hopium pipe...

Sat, 02/11/2012 - 18:08 | 2149756 TruthInSunshine
TruthInSunshine's picture

Paul Krugman IS PISSED that I'm talking about the official (based on U.S. Government's own numbers) debt, let alone David M. Walker's or Laurence Kotlikoff's figures.

He just tweeted:

 

@TruthInSunshine:

 

You keep referencing those debt numbers, but you always fail to include the fact that the Nobel Laureate (and IMF & World Bank) acceptable debt level for the United States during times of economic weakness, using The Krugman Principle = 30 times National GDP. This would comfortably allow the United States to accrue a debt of 450 trillion USD.

 

You are a scaremonger and doom & gloomer, loser.

 

Sincerely,

 

Dr. Paul Krugman, Ph.D., Nobel Laureate Economist

 

*Screenwriter of the upcoming AMC Series, 'When The Axis Powers of Martians & Uranusians Attack Earth, You'll Wish We Had Went Into Even Far More Debt'

 

I had better put more thought into what I write. He does have a Nobel Laureate in Economics.

Sat, 02/11/2012 - 18:24 | 2149771 s2man
s2man's picture

Now, that's funny.

Sat, 02/11/2012 - 18:49 | 2149800 insidious
insidious's picture

Paul didn't give you whole scoop. Based on his Nobel Laureate Economist thesis the acceptable debt to GDP ratio for the United States during times of economic weakness is based on an exponential function (the specifics of which are kept secret!). The worse things get the greater the allowable debt to GDP ratio. In the mind of Paul Krugman there is no limit to debt to GDP ratio for the US.

Sun, 02/12/2012 - 07:35 | 2150530 The Alarmist
The Alarmist's picture

Krugman uses a log-log model with a few dummy variables for good measure ... Wait, I read that wrong ... Krugman was logged by a dummy for good measure.

Sat, 02/11/2012 - 20:45 | 2149941 nmewn
nmewn's picture

Paulie's first audition as a comedian flopped...lol.

I'm thinkin ditch digger or drunken window breaker is better suited to his abilities.

Sun, 02/12/2012 - 12:55 | 2150906 TheFourthStooge-ing
TheFourthStooge-ing's picture

nmewn said of Fake Nobel Prize in Economics Award recipient Paul Krugman:

Paulie's first audition as a comedian flopped...lol.

I'm thinkin ditch digger or drunken window breaker is better suited to his abilities.

It would have to be drunken window breaker. Ditch digging requires formidable skills (marking the path with stakes and string, calculating the slope (because water still flows downhill), and operating a shovel) which are likely beyond the grasp of a Fake Nobel Prize in Economics Award laureate.

 

Mon, 02/13/2012 - 14:45 | 2154452 i_fly_me
i_fly_me's picture

"because water still flows downhil"

WhatEVER, you friggin Austrian Schooler ...

 

Sat, 02/11/2012 - 19:59 | 2149897 SGS
SGS's picture

Madagascar bitchez!

Sat, 02/11/2012 - 14:54 | 2149508 pine_marten
pine_marten's picture

Phooking Santorum.  Snake handling womb boss pip squeek.

Sat, 02/11/2012 - 15:25 | 2149553 Silver Bug
Silver Bug's picture

That clock has morphed into a ticking time bomb.

 

http://silverliberationarmy.blogspot.com/

Sat, 02/11/2012 - 14:54 | 2149509 q99x2
q99x2's picture

Costa Rica here I come.

Sat, 02/11/2012 - 15:31 | 2149568 xela2200
xela2200's picture

Good luck with that.

Sat, 02/11/2012 - 17:59 | 2149753 DoChenRollingBearing
DoChenRollingBearing's picture

If q99x2 has assets, and/or friends, and/or speaks Spanish, Costa Rica IS a good option.

Sun, 02/12/2012 - 00:06 | 2150196 xela2200
xela2200's picture

Costa Rica is not what it used to be. I do speak Spanish, and I am from the region. The truth is you are placing your bets. At this point, who knows what can happen. Costa Rica's main income comes from coffee and tourism. No country is an island anymore. Already their entitlement programs are starting to weigh in the country (health care) and real estate through the roof. Guess who they blame for that (fucken politicians)? Foreigners become targets during times of stress. Just read some of the comments in this board. Lastly, many retires are seen their dollar loosing value against local currencies. In other words, the dollar is turning into crap and when you convert it to colones evaporates quickly. I am not saying don't go. Just don't do it because you think you are going to be insulated.

Also, You NEVER know what a desperate US government can do because, at this point, it is unimaginable.

Do NOT follow this link or you will be banned from the site!