Our Economy Is On A Road To Nowhere
Credit: Natural Born Conservative Blog
I read an analysis early this morning which made the claim that our GDP had to grow at a minimum of 3.5% a year over the next 10 years just to equal the National Debt. By 2019, the Debt would be equivalent to a year’s GDP.
At first the claim sounded suspicious, but after reading the analysis, checking the sources (and doing the math myself) it appears that the claims made by Larry Walker Jr. on his blog “Natural Born Conservative” are 100% correct.
Given our economy has just undergone a major contraction in which 8.5 million jobs have been lost and is currently declining at a rate of about 1.25% a year, the likelihood that National Debt as a percentage of GDP will actually exceed 100% of GDP.
What does this mean? It means that to service the interest on our debt alone, taxes will have to skyrocket. (I’m still working on that calculation myself based on the “average” income of the top 50% and lower 50% of all Americans.)
GDP must grow from $14,198.5 to $19,224.3 billion in order to equal the National Debt by 2019. In other words, GDP must increase by $5,025.8 over the ten year period. This represents an increase of 35.4% for the period. That means that GDP must grow at a rate of 3.54% per year in order to equal our National Debt by 2019.
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GAO FINANCIAL AUDIT Bureau of the Public Debt’s Fiscal Years 2007 – 2008
US Treasury National Debt
Small Business Owner Confidence Plunges
Threats of Higher Taxes, Government Intervention, Wealth Confiscation Dim View of Economy
Although the Fed and most economic forecasters are all looking ahead to the recovery, small business owners do not see convinced.
Economic confidence among America's small business owners plummeted in November, as more owners cited serious concerns about cash flow and saw economic conditions for their own businesses getting worse.
- 52 percent of owners say they have experienced cash flow issues in the past 90 days, up from 44 percent in October. ...
- 53 percent of small business owners see conditions getting worse in the next six months, up from 43 percent in October...
- 62 percent of small business owners rate the economy as poor, an increase from 55 percent in October...
- 53 percent of small business owners think the overall economy is getting worse.
A majority of small business owners think the economy is getting worse, not better. And if small businesses are not confident, then they are not hiring.