Take a look at this chart, and then think very carefully about your answer (click to enlarge) –
USA - Federal Surplus / Deficit since 1901
That chart is from the US Federal Reserve, St Louis branch. For the last 108 years.
And it’s not bang up to date. It only goes up to end September 2009. Hard to believe, but the US government has gone much, much deeper into the negative in the 5.5 months since then. In February alone, the US went another US$221bn into the hole. That’s a one month record.
Do you remember how the Rudd Labor and mainstream media’s assault on Barnaby Joyce’s economic credibility began? When he publicly questioned whether the US could default on its debt.
Well… what do you reckon? Look at that chart. Think about it. Use your own commonsense.
And there are plenty of esteemed international economists … including the current chairman of the US Federal Reserve… who agree.
As does US Secretary of State, Hillary Clinton, who called the US deficit a ‘national security risk’ just 2 weeks ago.
Barnaby Is Right 
You know, a graph like that’s kind of meaningless when you’re looking at just the $ value of the debt. It’s only meaningful if you compare it to say GDP or say Population.
It’ll still get the point across, but you won’t have a ridiculous flatline for 60 years, even during the great depression, 2 world wars etc.
The reason it looks like a “flatline” for so long, is because the sheer massive scale of the current deficit dwarfs the earlier records. It’s not meaningless at all.
For perspective, take a look at the same chart here, but dropping the last 40 years (ie, only showing 1901 to Sep 1979).
Comparing to GDP is meaningless, when the government can (and does) fake up a “substantial increase” in the GDP numbers, retrospectively applied to the historical data. Click here to see how Rudd Labor have done exactly that.
@ABS
Please remeber the USA’s deficit is expected to reach 9 trillion over the coming decade… let me repeat that…
9000000000000 dollars and what does gdp have to do with this?
US average tax receipts since WW2 is 18% of gdp… this fell to 17.7% in 2008 and 15.4% in 2009 and I wonder what they will be for 2010???
So considering that tax receipts are falling, not a single cent can be used to repay these debts, baby boomers are retiring, and UNFUNDED LIABILITIES are estimated to be anywhere between 55 trillion dollars ans 90 trillion dollars over the coming decades, well… you do the math…
Barnaby is right and he will be vindicated.
Only I don’t agree with him on one thing, we will not have to wait until 2012 before this shithouse goes up in flames…
Unless Bernanke can figure out a to reduce th price od oil to somewhere close to $30/barrel. Checkmate, and we’ll all go down with the ship.
Australia may be an island, but its not en economic island.
Nicholas,
Good thoughts and comments.
Re Barnaby & your comment, “I don’t agree with him on one thing,we will not have to wait until 2012”.
I gather you are referring to the post yesterday, titled “Junk Bond ‘Apocalypse’ In 2012”? Please note that this is simply an opinion piece, referring to an article in the New York Times.
I should just clarify for other readers – Barnaby Joyce has NOT made any predictions or set any dates for anything.
Please note carefully the Disclaimer on the ‘About’ page. Senator Barnaby Joyce has no connection whatsoever with this blog. This blog is an entirely private exercise in free speech, and all opinions expressed are those of the blog author only.