The U.S. National Debt and Selected Reduction Plans and Interest Group Positions

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Fifteen trillion three hundred and fifty-six billion one hundred and forty million dollars was the measure of the public debt at last count in January 2012 (The Bureau of Public Debt). Even at the current higher-than-average national average gas price of $3.51 that could buy more than four trillion gallons of gas (Pankratz). That’s enough gasoline to drive a Hummer H2 around the equator of the Earth one hundred and seventy-five million times. It is also 31 times the U.S. yearly consumption of gasoline(U.S. Department of Energy). The ratio of government debt held by the public to current dollar gross domestic product is 70 percent but the ratio of total debt including intergovernmental holdings to GDP is 102 percent (Bureau of Economic…show more content…
He started with a debt of $10.6 trillion and the current debt is $15.3 trillion. A lot of that comes from the American Recovery and Reinvestment Act in 2009. Bush accumulated debt faster than the presidents before him and Obama is continuing the trend. Of course, the president isn’t solely responsible for the debt but it proves a good way to organize. The debt could lead to a financial crisis. A U.S. credit default or fears of such default could cut off credit flowing to the United States. A true sovereign debt crisis is unlikely to occur in the United States as the U.S. debt is held in dollars and the Federal Reserve could always print more dollars (Wallison). A true crisis could only occur if our debt was held in the Euro or Chinese Yuan. But the U.S. could still have a pseudo-default situation where concerns about American ability to repay debt limit creditor’s willingness to loan money.
Wallison sees the trend of divided government continuing and doesn’t see compromise as likely without the onset of a crisis. If Congressional Budget Office outlooks hold true, and the U.S. keeps it’s same policies the debt will be double annual GDP by 2041. When the markets and financial sector sees a point of no return where the Federal Reserve can’t pay off the debt without major inflation, a debt crisis consisting of damaging inflation will occur. This will send negative shocks through the U.S. economy. The buying power of the dollar will fall and Americans will no longer be

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