Charles Hugh Smith takes a tour of recent public debt and annual GDP and delivers the bad news:
Here are the numbers . . .
Total public debt in 2007 (pre-recession) was $8.95 trillion.
Total public debt in 2010 was $13.53 trillion.
This is an increase of $4.58 trillion.
Add in the 2011 deficit of $1.6 trillion and the total is $6.1 trillion in additional debt in the four years from 2008 to 2011.
GDP in 2007 (pre-recession): $14.08 trillion
GDP in 2008 (recession starts): $14.44 trillion ($364 billion gain)
GDP in 2009 (recession officially ends in mid-2009): $14.12 trillion ($322 billion decline)
GDP in 2010: $14.51 trillion ($390 billion gain)
Let's be generous and assume the U.S. economy continues "growing" at the first-quarter pace of 1.8% for all of 2011: GDP advanced 1.8% in Q1 2011 (BEA). That would add $260 billion to the 2010 GDP, so the GDP at the end of fiscal year 2011 would total $14.77 trillion in nominal dollars. In constant dollars, it might reach back up to 2007 levels, but only if the economy doesn't roll over.
Total up the gains and declines in annual GDP for the four years from 2008 through 2011, and you get $690 billion. That's the total sum of each year's gains for the four years.
That means we as a nation borrowed and spent $6.1 trillion to get $700 billion in GDP "growth."That means we borrowed and spent $8.70 for each $1 of nominal GDP "growth."
