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America ’ s Looming Debt Crisis

America ’ s Looming Debt Crisis. Executive MBA George Mason University Spring 2012. Uncle Sam in Debt. Federal Debt: Then and Now. September 30, 1991 $ 3,665,303,351,697.03 Per Person 1991 $14,505 October 11, 2011 $14,822,787,487,080.00 Per Person 2011 $47,445.

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America ’ s Looming Debt Crisis

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  1. America’s Looming Debt Crisis Executive MBA George Mason University Spring 2012

  2. Uncle Sam in Debt

  3. Federal Debt:Then and Now September 30, 1991 $ 3,665,303,351,697.03 Per Person 1991 $14,505 October 11, 2011 $14,822,787,487,080.00 Per Person 2011 $47,445

  4. Who Holds U.S. Debt? Debt Held by Public $9.946 Trillion by Foreign Governments $4.499 Trillion Debt Held by U.S. Gov’t $4.669 Trillion Net Debt = Debt Held by Public

  5. Agencies Holding U.S. Debt:Social Security Trust Fund

  6. Agencies Holding U.S. Debt:Federal Reserve Banks

  7. Agencies Holding Debt(2011)

  8. US Debt Held by Foreign Governments (In $U.S. Billions)

  9. U.S. Debt to GDP Ratio, 1790-2010

  10. U.S. Surplus & Deficit, 1800-1859(In Millions)

  11. U.S. Surplus & Deficit, 1860-1909(In Millions)

  12. U.S. Surplus & Deficit, 1910-1959(In Millions)

  13. U.S. Surplus & Deficit, 1960-2009(In Millions)

  14. Expenditure/GDP 1790-2010

  15. Expenditure-GDP Ratio 1810 1% 1910 2% 2010 24%

  16. Revenue/GDP 1791-2010

  17. Revenue to GDP 1910 2% 2010 15%

  18. Government Expenditures 2010

  19. Gov’t Expenditures 2010 ($3.2 Trillion)

  20. Government Receipts 2010(in millions)

  21. Revenues (%GDP)

  22. Government Receipts 2010$(2.33 Trillion)

  23. Debt to GDP Ratio, 2011-2031CBO Projections*

  24. Alternative Projection

  25. Spending Drivers(as a Per Cent of GDP)

  26. Economists Advocating Deficits Keynes Keynesians Krugman Summers

  27. The Keynesian Logic GDP = C + I + G + (X-M) Marginal Propensity to Consume (MPC) MPC = ΔC ÷ ΔY ΔGDP = ΔG ÷ (1-MPC) (Income Multiplier)

  28. Economists Against Deficits Smith Marx Buchanan Hayek Marx

  29. Reasons Opposed to Deficits • Governments default on loans. • Wasteful expenditures. • Financiers get rich on taxes • Financiers influence policy • Crowds out private investment • Creates trade deficits • Burdens future generations

  30. Debt to GDP by Country(EIU Estimates) 2010 2011 2012 Japan 200% 205% 209% Greece 143% 153% 154% Italy 119% 121% 121% U.S.* 95% 98% 101% Germany 83% 81% 80% China* 41% 41% 41%

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