Global Economic Collapse: US Gross National Debt Jumps by $1.2 Trillion in Fiscal 2019, to $22.7 Trillion, Hits 106.5% of GDP
October 2, 2019 by IWB
But what happens if there’s actually a recession?
The US gross national debt jumped by $110 billion on the last two business days of Fiscal Year 2019, and by a breath-taking $1.2 trillion during the entire fiscal year, after having already jumped by $1.27 trillion in Fiscal 2018, the Treasury Department reported today. This ballooned the US gross national debt to a vertigo-inducing $22.72 trillion.
These beautiful trillions whipping by are a joy to behold: so much action in so little time. The flat spots in the chart below are the results of the debt-ceiling charade in Congress. When the debt ceiling is lifted, the debt spikes back to trend, and nothing changed:
During Fiscal 2019, the gross national debt increased by 5.6% and now amounts to 106.5% of current-dollar GDP, up from 105.4% at the end of Fiscal 2018.
The thing to remember here is that this isn’t the Great Recession or the Financial Crisis, when over 10 million people lost their jobs and credit froze up and companies went bankrupt and tax revenues plunged while outlays soared to pay for unemployment insurance and the like. This isn’t even the Collapse of Everything, but the longest expansion of the economy in US history.
Over the
last four quarters, the US economy as measured by nominal GDP (not adjusted for
inflation) grew by 4.0%. Over the same period, the US gross national debt grew
by 5.6% (not adjusted for inflation).
In dollar terms, it looks even funnier: The economy as measured by nominal GDP over
the past four quarters grew by $830 billion. The Gross National Debt grew by
$1.2 trillion.
Fed Chair Jerome Powell keeps saying that the US
is on an “unsustainable fiscal path,” which is fine and dandy, but every
time he says this, he sounds like a fossil that is completely out of touch with
reality in Congress where all this got passed. “Sustain” for these folks
in Congress means sustaining their campaign funds and sustaining them through
the next election.