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Inflection point - when debt to GDP exceeds 100%, a country's financial flexibility becomes increasingly strained. For the first time since WWII, US debt exceeds 100%. From 2008 to 2010, debt rose a total of 23.6% while GDP rose a total of 1.6%. Unfortunately, with an annual federal budget deficit in the area of $1.4T, debt is likely to reach $16.7T as of the end of 2012 while assuming GDP grows 2.5%, total GDP is likely to reach $15.7T. Therefore, as of the end of 2012, debt to GDP is likely to be in the area of 106%. Assuming the federal deficit for 2013 remains at $1.4T and GDP growth is 2.5%, the total debt will rise to $18.1T and GDP will rise to $16.1T, resulting in debt to GDP of 112%. In comparison, France's and Italy's debt to GDP are 81% and 117% respectively. Regarding efforts to address budget problems, the Super Committee was seeking spending cuts of $1.5T over 10 years or merely $150B per year, and was a failure. Obviously, the current course is not enhancing credit quality.
Originally posted by skuly
Lets be honest it was only a matter of time till the US had another
cut in its ratings.
Originally posted by gladtobehere
Either we get Ron Paul into office, or the United States will collapse like Russia, Europe, Zimbabwe etc.
Originally posted by EmperorXyn
It's sad this country doesn't elect good Presidents like Paul... Seriously, after this election i've lost all hope for anything good coming from this country other than greedy, and corrupted politics. Although, I hope the government isn't as evil as they look, and have a plan to keep us ahead of the rest of the world. But who knows.
Originally posted by SavedOne
Now tell me what kind of magic beans Paul or anyone else can plant that will fix this. We need to wake up and realize that there is no fixing it. Financial collapse is inevitable, that's what we need to prepare for.