U.S. debt exceeds annual economic output
The total of the U.S. debt load is now $15.2 trillion, more than the annual value in goods and services of the country's economy.
Although the specific figure is difficult to pinpoint, the benchmark was likely reached at some point in the last few days, USA Today first reported Monday. In layman's terms, it means the world's largest economy now collectively owes more than its entire annual output is worth.
As of Monday morning, U.S. federal debt currently sits at $15.2 trillion. According to the most up-to-date estimates from the Bureau of Economic Analysis — the U.S. equivalent to Statistics Canada — the total value of all the goods and services that the U.S. produces sits at $15.17 trillion. That figure is growing at a 4.4 per cent annual pace at the moment, not enough to keep up with the increase in America's debt load.
"It's a bit like saying your debt is as high as your family's annual salary," said Ian Nakamoto, research director with MacDougall MacDougall & MacTier in Toronto. "It's a pretty symbolic moment."
After an acrimonious debate, the U.S. Congress agreed over the summer to hike America's debt ceiling, the total amount that the U.S. government is allowed to borrow, to $14.7 trillion. That figure will have to be adjusted again as the debt ticks higher, but it's going to happen amid a highly politicized election season through 2012.
Experts predict the economy would have to expand at a pace of about six per cent per year just to keep up with the level at which the country's debt load is expanding. America's debt load has been higher than the country's total annual economic output before, but not since the Second World War era.