I subscribe to a newsletter put out by www.shadowstats.com. At Shadowstats, John Williams dissects the statistical data published by government agencies and analyzes it. You can meet John Williams here – in an old interview on CNN where he actually forecast the current economic problems. He is an expert on pointing out where the methodologies used might lead to results that are perhaps less than accurate. However, in one newsletter he published the federal government’s GAAP results. These figures are accurate – in other words, they are what they are.
GAAP is an acronym for Generally Accepted Accounting Principles. It is the standard that publicly traded US corporations must use when publishing their financial statements. The federal government publishes, in essence, two financial statements. One involves the opinion of the treasury with regard to the financial condition of the national ledger and balance sheet, and the other is the GAAP version. It is interesting that the GAAP version does not get much news coverage. And this year it came out several months late. Mr. Williams has graciously given permission for non subscribers to assess the report. You can view it here:
These are government released figures. I think it is somewhat alarming to realize that the federal government’s total obligations are over $70 Trillion – roughly the equivalent of 5 years of total US economic output. That’s double the figure from only seven years ago and up $5 Trillion in the last year! We are literally drowning in debt – the national equivalent of a sub-prime mortgage.
Here are some more sorry statistics (these are non GAAP numbers):
Estimated Debt to GDP ration for 2010
Estimated Budget Deficit in % of GDP
United States
94.30%
10.60%
United Kingdom
73.70%
14.00%
Japan
196.40%
8.90%
Portugal
85.40%
8.30%
Ireland
12.00%
14.70%
Italy
117.00%
5.00%
Greece
124.90%
12.20%
Spain
59.20%
10.10%
Germany
77.00%
6.00%
You might have read in the financial press about the “so called” PIIGS – Portugal, Italy, Ireland, Greece and Spain. These are European nations that have made headlines because of their financial woes. Greece has come close to defaulting on its sovereign debt. Portugal is not far behind. Ireland is in bad shape also, with rumors that the European Union is going to take action against them. However, if you look at the chart above, the United States is going down the same road as Europe.
Instead of coming to our senses, our leadership in Washington is stepping on the accelerator pedal with regard to the accumulation of debt. Bank bail outs, stimulus programs, so-called “job creation” programs and the new health care reform are piling debt upon debt. If we don’t change our policies very soon, we will slip into the same malaise that has taken hold in Europe. When the bill comes due, we will be forced to pay the piper. We need fiscal responsibility for the sake of our standard of living, our children and grandchildren and our freedom.
Drowning in Debt
I subscribe to a newsletter put out by www.shadowstats.com. At Shadowstats, John Williams dissects the statistical data published by government agencies and analyzes it. You can meet John Williams here – in an old interview on CNN where he actually forecast the current economic problems. He is an expert on pointing out where the methodologies used might lead to results that are perhaps less than accurate. However, in one newsletter he published the federal government’s GAAP results. These figures are accurate – in other words, they are what they are.
GAAP is an acronym for Generally Accepted Accounting Principles. It is the standard that publicly traded US corporations must use when publishing their financial statements. The federal government publishes, in essence, two financial statements. One involves the opinion of the treasury with regard to the financial condition of the national ledger and balance sheet, and the other is the GAAP version. It is interesting that the GAAP version does not get much news coverage. And this year it came out several months late. Mr. Williams has graciously given permission for non subscribers to assess the report. You can view it here:
http://www.shadowstats.com/article/282-federal-2009-gaap-accounting
These are government released figures. I think it is somewhat alarming to realize that the federal government’s total obligations are over $70 Trillion – roughly the equivalent of 5 years of total US economic output. That’s double the figure from only seven years ago and up $5 Trillion in the last year! We are literally drowning in debt – the national equivalent of a sub-prime mortgage.
Here are some more sorry statistics (these are non GAAP numbers):
You might have read in the financial press about the “so called” PIIGS – Portugal, Italy, Ireland, Greece and Spain. These are European nations that have made headlines because of their financial woes. Greece has come close to defaulting on its sovereign debt. Portugal is not far behind. Ireland is in bad shape also, with rumors that the European Union is going to take action against them. However, if you look at the chart above, the United States is going down the same road as Europe.
Instead of coming to our senses, our leadership in Washington is stepping on the accelerator pedal with regard to the accumulation of debt. Bank bail outs, stimulus programs, so-called “job creation” programs and the new health care reform are piling debt upon debt. If we don’t change our policies very soon, we will slip into the same malaise that has taken hold in Europe. When the bill comes due, we will be forced to pay the piper. We need fiscal responsibility for the sake of our standard of living, our children and grandchildren and our freedom.