As reported by the Bureau of Economic Analysis, here.
With Q1 GDP at 0.4 percent, average GDP is at a paltry 0.85 percent so far in 2011.
Average annual GDP from 1930-2000 was 3.5 percent.
For the ten years from 2000 it averaged 1.67 percent (Europe was worse, at 1.5 percent).
A measly 0.85 percent in 2011 is stall speed, and that means less government revenue, which makes the deficit worse and the national debt grow, interest payments on which will exceed $434 billion this year, about one eighth of current spending of $3.8 trillion, or 12 percent.
Think of that as having to make interest payments on debts of $236,000 totaling $7,440 every year, $620 every month, on a salary of $62,000.
The implied interest rate of 3.15 percent won't last forever, but let's be generous and assume it does while what you owe keeps growing by 9 percent per year for the next decade because you keep spending and you never pay it down. Let's also assume you get a crummy annual raise of 1.7 percent every year for ten years.
Now you'll owe over $596,000 supported by a salary of nearly $74,000, but your interest expense will have grown to nearly $19,000 from $7,440 ten years prior, amounting now to 25 percent of your income as compared with 12 percent of your income then. More than doubled.
That's where America is headed . . . if interest rates don't rise and slow growth mirrors 2000-2010.
Think of that as having to make interest payments on debts of $236,000 totaling $7,440 every year, $620 every month, on a salary of $62,000.
The implied interest rate of 3.15 percent won't last forever, but let's be generous and assume it does while what you owe keeps growing by 9 percent per year for the next decade because you keep spending and you never pay it down. Let's also assume you get a crummy annual raise of 1.7 percent every year for ten years.
Now you'll owe over $596,000 supported by a salary of nearly $74,000, but your interest expense will have grown to nearly $19,000 from $7,440 ten years prior, amounting now to 25 percent of your income as compared with 12 percent of your income then. More than doubled.
That's where America is headed . . . if interest rates don't rise and slow growth mirrors 2000-2010.
