According to an official Treasury Department report to Congress, total U.S. public debt will hit nearly $20 trillion by 2015. The report states that the ratio of total public debt to GDP will rise to a staggering 102% over the same period.
A CNBC article listed the following expenditures as the primary culprits for the unprecedented debt explosion:
Wall St bailout
Afghanistan and Iraq wars
Stimulus
Obligations to Social Security and other government trust funds
At the very least, experts such as University of Maryland professor, Carmen Reinhart, warn that economic growth could be slowed for years to come. Reinhart has testified for President Obama’s bipartisan deficit reduction commission. Other experts, specifically hailing from the Austrian School of Economics, have warned of a future collapse in the value of the U.S. Dollar due to chronic deficits.
Even Federal Reserve Chairman, Ben Bernake, the champion of loose monetary policy, is beginning to warn about the future impact of fiscal irresponsibility. A Business Insider article highlights some chilling statements from a recent Bernanke interview with CNN:
“Bernanke talked about the need for U.S. leaders to take control of the nation’s deficits over the medium term, some three to six years from now, in a way “that will allow us to bring our fiscal house in order over a long period of time.”
But when asked if the nation has such a plan, or if he’s seen one, Bernanke said: “No. Not yet. I don’t.”
More and more financial experts are sounding the alarm bells about unsustainable debt levels. Whether it’s been Bush and a Republican Congress, Obama and a Democratic Congress, Greenspan or Bernanke at the Federal Reserve, U.S. fiscal and monetary policies have put the United States on a collision course with a full-fledged debt disaster.