The U.S. debt mountain is formidable.
……………………………………………………….. Excerpts from: ZeroHedge 12/22/2014 Submitted by Bill Bonner via Acting-Man blog,
US GDP is reported to be $18 trillion a year – with $3.5 trillion coming from US federal government spending. Add state and local government spending, and the total rises to more than $6 trillion.
This means that the private sector – the part that pays the bills – is only $12 trillion. Total debt – government, corporate and personal – in the US is now $58 trillion…. That’s nearly five times the real economy that supports it.
And it helps explain why it is so hard to “grow your way out” of debt. Assuming an annual interest rate of 2%, even if you could contain debt increases to 3% of GDP a year, the productive part of the economy would have to grow at 5% just to stay even. No developed economy in the world is growing that fast.
At an interest rate of 3%, the annual interest on $58 trillion is $1.7 trillion. That’s slightly less than 10% of GDP. But it’s 14% – or one of every seven dollars – of the private sector economy.
And as recently as January 2002, the 10-year Treasury note yielded over 5%. If the average interest rate were to rise to that level again – and sooner or later it will – it would take $3 trillion to service America’s debt – or one-quarter of private sector output.
That can’t happen. The wings would fall off first. There would be a bear market in stocks and a depression in the economy – wiping out trillions of dollars of unaffordable debt and unworkable investments.
There is a “light at the end of the (debt) tunnel.”
It starts with massive debt reduction at ground level for U.S. citizens in the form of liquidity extensions, direct to American families, administered through a Fed-based Citizens Credit Facility.
If the U.S. doesn’t do something ‘creative’ real soon, there will come a cold, hard, grinding ‘reset’ of hard assets vs paper. And there is likely to be a lot of ‘disorder’ in the markets.
The Leviticus 25 Plan is the only comprehensive plan anywhere that can get America moving forward again.
Ask your members of Congress what their plan is…
The Leviticus 25 Plan 2015 – $70,000 per U.S. citizen The Leviticus 25 Plan 2015 (699)