The national debt to GDP ratio is now over 100 percent. It’s official now.
Well, almost. We’ll know more when the first quarter Gross Domestic Product (GDP) numbers are published by the Bureau of Economic Analysis on April 27.
But, based on a preliminary analysis of data on the GDP and national debt figures from the Bureau and the U.S. Treasury, barring greater than expected GDP growth in the first quarter, the national debt probably eclipsed the economy in sheer size, perhaps never to return, on or about Feb. 23, 2012.
Since the beginning of the year, the national debt has grown by $265.58 billion, or about $4.42 billion every day, to $15.488 trillion. That compares with an economy that is probably only growing by about $1.66 billion a day to a current level of about $15.420 trillion.
Therefore, the current debt to GDP ratio is already 100.4 percent — and climbing.
When Barack Obama took office it was a little over 74 percent when the debt was about $10.4 trillion. The reason the ratio has skyrocketed is because the debt has been growing much faster than the economy. While the economy grew at 1.8 percent in 2011, the debt grew by over 10 percent, an astounding figure.
In 2012, this process will continue, when the debt will grow at over 7 percent for the year, much faster than the economy, which is only expected to grow at 3 percent.
Meanwhile, some economists, calling themselves Modern Monetary Theorists, still maintain remarkably that debt really does not matter at all. That as long as the nation’s central bank prints more money to perpetually refinance the debt, all is well.
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