The debt to GDP does not look quite as bad as the gross debt. At least it does not look like a hockey stick.

National Debt

But let's think about that for a bit. What exactly is GDP? Well it is a number based on supposedly Gross Domestic Product. But that figure includes government spending which is a component of the national debt. So of course if we increase government spending by accumulation of debt, GDP is going to go up. Want to make GDP go up more? More supposed growth? Just deficit spend a few more trillion dollars. Wallah! More GDP! More growth! Problem solved! NOT! Back out the deficit spending from the GDP numbers and not only have we not had any growth, it is negative.

Kind of like growing a farm by borrowing lots of money. Growth rates can be fantastic! But when the debt is growing faster than the ability to service it and pay it back........................ well then you have an unsustainable situation not unlike the position the US is in right now.

Deficit spending is nothing but a tax burden on future generations. Or if it is considered it never will be paid back then it is just monetization of the debt (money printing) which means the existing money supply is being diluted which is just a stealth inflation tax on current citizens.

Oh well. It is the way it is. I have just decided to do kind of like what Denninger talks about. Don't worry, be happy. Enjoy what time I have left. Of course if too many working age people get the same idea, then that is when everything implodes in on itself. When the producers decide to take a holiday and get by minimally instead of busting their humps for the American Dream, that is when tax revenues dry up, the government can't support its programs, and the ones who have become dependent on government largess get unruly. That is when the parasite will have killed the host. And unwittingly itself.

John