The U.S. National Debt Versus GDP Crisis

crushing debt

Gross Domestic Product (GDP) is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period. National Debt is the total dollar amount that a Government has in outstanding debt. This article is a comparison of the 2015 U.S GDP to the U.S. national debt on December 31, 2015 and how that affects the U.S. economy.

The United States 2015 year end National Debt as a percent of the U.S.2015 GDP was 104.17 percent (total GDP divided by total National Debt). Another important GDP percent is the annual GDP growth rate. Why is the National Debt, as a percent of annual GDP, and the annual GDP growth rate important? Because they are undeniable indicators of how healthy the U.S. economy is now, will be in the immediate future, over the next few years, and to some degree, long term.

How are these two percentage numbers “undeniable economic indicators”?

First, if national Debt as a percent of GDP is over 100 percent it means that if the U.S. Government took ALL of the goods and services produced in the previous year and converted them to U.S. dollars the amount of money generated would NOT pay off our national debt!

Second, a 3 per cent annual GDP growth rate is considered by most economists as the minimum annual growth rate necessary to meet the minimum needs of the expanding U.S. population.

Both of these economic measurements indicate the U.S. economy will be even weaker on December 31, 2016. The projected National Debt will be over $20,000,000,000,000 (yes that is the correct number of “0’s) by December 31, 2016 and the Obama Administration has presided over an economy where the monthly GDP growth rate has not exceeded 3 percent a single month during his time in office and has actually been less than that during many of his months in office. The GDP growth during the 1st Quarter of 2016 was only 0.05 percent, which is extremely weak by any measurement.

It is even more concerning when you consider that our Government managed to accumulate this much debt, and continues to add to it while the national Interest rates have been at historical lows for years. Imagine what our National Debt annual growth rate will be when interest rates increase?

An interesting side note to this situation is that at one point during his presidency President Obama and key members of his staff were bragging to the media that, “we are reducing the deficit at the fastest rate since the end of WWII”, and no one called them out on it!

How did we get here? It is simple, our U.S. Government continues to spend more money than it generates year after year after year. This is in spite of the fact that it is the only Government entity in America that has the legal authority to endlessly print its own money and  borrow money with no limits by issuing and selling U.S. Treasury Bills, Notes and Bonds.

What is even more frightening is that the growth in our National Debt has happened on a continuing basis (as noted above) with national interest rates at historical lows for years and our National Defense budgets being slashed every year for the last few years.

Here is a small sample of the  slashed National Defense budgets:

The U.S. Army has been reduced to about the size it was in 1940. In addition to the huge “Reduction in Force” orders, the lack of adequate funding has also created a situation where two thirds of our active duty military are not prepared or equipped to be deployed.

Our Marine aviation unit’s budgets have been cut so deeply that the pilots in a squadron that is scheduled to be deployed have only been able to log one hour a month of training time when the minimum requirement is 10 hours. The maintenance personnel in this unit have been working 18 hours a day to try and keep their aircraft flying. They are working schedules like this because they must cannibalize some aircraft to keep others flying.

A B1 bomber squadron with 20 planes only has 9 that can fly.. They do not have the parts to repair the other planes. Some of the planes have over 10,000 hours in the air.

An F16 squadron that just returned to the states has been scavenging parts from planes displayed in museums in an effort to try and keep their planes flying.

42 years ago the U.S. Navy had 70 Admirals and over 7,000 ships. Today it has more Admirals than ships. This ridiculous “top heavy” situation exist in every branch of our national defense system. The “Reduction in Force” orders that have been issued and carried out generally applied to the career line officers and NCOs who were the back bone of our military, not the top brass.

What if we suddenly experience a national emergency? (Sound familiar? Bill Clinton and 9/11).

While they were continually slashing National Defense spending the Obama Administration, with the help of the Ideologues on the “Left”: and the rino Republicans in Congress was constantly increasing government spending in virtually all other government departments. Here is a small sample of areas where Government spending has steadily increased:

The U.S. Government work force has steadily increased with many of the new employees not being qualified for the jobs they were hired to do. Some even had “Do Not Rehire” stamped on their personnel files! This situation is aggravated by the fact that the productivity rate of most U.S. government employees is much lower than the productivity rate of employees in non- government jobs. Why should you make an effort to do your job well when it makes no difference on your performance evaluations or annual salary or wage increases, and you CANNOT be fired?  Look at the V.A. as an example.

There are significantly more Czars in the Obama Administration than in any previous administration. Plus they all have staffs and annual operating budgets. In most cases the President can appoint Czars without Congressional approval.

The Obama Administration has significantly more staff members who earn the maximum salary of $175,000 per year than previous administrations. In addition the administration has a significant number of staff members who earn around $171,000 per year. The staff members who earn less than $175,000 per year do not have to be accounted for on the annual list of staff members who earn the maximum allowable annual salary.

The annual budgets for food stamps, free cell phones, and many other “Government Assistance” programs have increased significantly during the Obama Administration.

Bottom line is that our government is operating like a family that continuously over spends on its credit cards while buying a house and new car that it cannot afford to make the monthly payments on!

Regarding people buying a house that they cannot afford to make the monthly payments on, that is the subject of a future article on massive Government corruption and how it destroyed our economy.

We have one chance to save our “Republic”, at least what is left of it in November. Get informed and CHOOSE wisely!

Information for this article was compiled from a variety of internet articles, books, and broadcast and cable news reports.

The information in this link seemed to sum up my observations perfectly.

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The opinions expressed in this commentary are solely those of the author and are not not necessarily either shared or endorsed by iPatriot.com.

Hardworking1

Retired senior executive, college graduate, deep interest in national and international currents events. Avid sportsman, conservationist, Veteran, "former" Federal Firearms License holder, and Concealed Weapons Carry permit holder since 1971. Strong believer in the U.S. Constitution. Libertarian on some issues but fiscal conservative on any level of government activities involving money. His articles can be found on his blog site, onlymakessense.com

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