U.S. “surging debt” 2016, Part 4: government debt

Seven short years and trillions of dollars worth of QE, toxic asset purchases (MBS, agency debt), direct liquidity infusions, credit guarantees, and various other debt relief bailout operations by the Federal Reserve and U.S. Treasury to revive economic growth and get America back on track – and where are we?

Economic growth is anemic.

Government debt is snowballing, and there is no credible government plan pointing the way out of this economic sinkhole.

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Hoisington – Quarterly Review and Outlook, First Quarter 2016:                              Excerpts:

Federal debt:

U.S. government gross debt, excluding off balance sheet items, gained $780.7 billion in 2015 or about $230 billion more than the rise in GDP….

The divergence between the budget deficit and debt in 2015 is a portent of things to come. This subject is directly addressed in the 2012 book The Clash of Generations, published by MIT Press, authored by Laurence Kotlikoff and Scott Burns. They calculate that on a net present value basis the U.S. government faces liabilities for Social Security and other entitlement programs that exceed the funds in the various trust funds by $60 trillion. This sum is more than three times greater than the current level of GDP.

State and local government debt:

State and local governments … face adverse demographics that will drain underfunded pension plans…. The state and local governments do not have the borrowing capacity of the federal government. Hence, pension obligations will need to be covered at least partially by increased taxes, cuts in pension benefits or reductions in other expenditures.

Total debt [federal, state, local] … increased by $1.968 trillion last year. This is $1.4 trillion more than the gain in nominal GDP. The ratio of total debt-to-GDP closed the year at 370%, well above the 250-300% level at which academic studies suggest debt begins to slow economic activity.

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The U.S. is sinking, deeper and deeper, into a massive debt bog.

Government policies have done nothing to change the course of our growing, out-of-control debt burdens.  We are swamped with enormous levels of household debt, business debt, federal, state and local debt.

We are getting buried in it..

Government policies are NOT the answer to our economic problems.  Government policies ARE the problem.

We need a citizen-centered solution.  Here is that plan:

The Leviticus 25 Plan 2017 –  $75,000 per U.S. citizen                                                   The Leviticus 25 Plan 2017 (1447)

 

 

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