US GDP/Debt ratio predicted to hit 150%!

Federal debt levels are going to surge to 150% of GDP in 30 years as a result of huge unfunded outlays on healthcare, social security and interest payments, according to the US Congressional Budget Office, which is an independent body.

Other than now (when is is 77% – double what it was (35%) in 2007) only once has the level of debt in America exceeded 70% – and that was immediately after World War II. Over the last 50 years, it has averaged 40%.

There are lots of reasons why that’s problematic, not least of which is that it severely limits the government’s ability to respond to unforeseen events and cannibalises government spending which has instead to be ear-marked for interest payments. It also reduces national income.

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