It's bad enough that Greece's debt problems have rattled global financial markets. In the world's largest economic and military power, there's a far more serious debt dilemma.
The government already has made so many promises to so many expanding "mandatory" programs. Just keeping these commitments, without major changes in taxing and spending, will lead to deficits that cannot be sustained.
How long have we been saying this?
The total debt pile has been growing faster than income for decades. A look at total credit market debt relative to income (GDP), which ignores many off the balance sheet liabilities, illustrates the addiction of US growth (economy) to debt issuance since 1981. Credit market debt as a percentage of GDP had reached 327% during the final gasp of the primary drop of the second great depression in the fourth quarter of 1932. As we approach 375% of GDP in 2010, we must ask ourselves how much is too much this time around? Be certain that the dollar's negative trend already reflects a daily response to that question.
Source: finance.yahoo.com
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