National Debt

After 20 years in Congress, I still believe that smaller government and lower taxes are the most effective economic policies.
- Howard Coble (R - NC, 6th District)

Time for my next government rant. :-)
I've been seeing many stories this past week on the size of the National Debt.

Our Debt Is More Than All the Money in the World points out that in 2008 the US debt was conservatively estimated to be $70 Trillion. (70,000,000,000,000) At the same time the global M3 money supply ("meaning cash, consumer-account deposits, checkable accounts, CDs, long-term deposits, travelers’ checks, money-market funds, the whole enchilada") was $60 Trillion. The Global GDP (value of produced goods) was also $60 Trillion. So in 2008 (pre-Obama) neither all the money in the World nor the total value of ALL goods produced was suffient to pay our debt. The debt has since become much worse.

For 2010 the annual US budget deficit will be the second largest in 65 years compared to GDP. The largest gap in 65 years was last year with the famous Stimulus package at 9.9% of the GDP. This is the same as spending 109.9% of what your takehome pay. This year we are over budget by 109.1%. Suppose you earn $100,000 with $70,000 net after taxes. With overspending at 10%-9% you add an additional $7,000 - $6,000 to your credit card EACH year that you can not pay back.

Where did this money go? Who knows? The beaucrats won't say, Financial crisis panel stonewalls Congress.

Bottom Line
How bad is the problem? Investors are losing faith in America, Treasurys Tumble Following Weak 30-Year Sale. (That's 30-year bonds backed by the US Government).