Why Just Focus on Government Debt?

In Debt on March 15, 2011 by CQCA Tagged: ,

Are you worried about the Federal debt going over 100% of GDP?  The overall picture is worse than that.

The Federal Reserve’s flow of funds summary statistics for the fourth quarter of 2010 showed that total U.S. debt was $50.5 trillion.  That number includes household (mortgage, consumer), business, state, local, federal, and financial institution debt.[1] If U.S. intragovernmental holdings are included, the total is over $55.1 trillion.[2] The U.S. GDP for the same period was $14.86 trillion.[3]

This means that the debt to GDP ratio of the entire United States is 372%.  For every one dollar made, $3.72 is owed.  Not only is U.S. government debt approaching 100% of gross domestic product, all U.S. debt (public, commercial, and private) is quickly approaching 100% of world GDP.[4]

[1] Federal Reserve data on Flow of Funds Accounts of the United States, Fourth Quarter 2010.

[2] Treasury data on intragovernment holdings, December 31, 2010.

[3] Bureau of Economic Analysis. “National Income and Product Accounts: Gross Domestic Product, 4th Quarter and Annual 2010.” February 25, 2011.

[4] The World GDP figure is from the International Monetary Fund’s data.




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