Debt now equals total U.S. economy

Stephen Dinan
The Washington Times

President Obama projects that the gross federal debt will top $15 trillion this year, officially equalling the size of the entire U.S. economy, and will jump to nearly $21 trillion in five years’ time.

Amid the other staggering numbers in the budget Mr. Obama sent to Congress on Monday, the debt stands out — both because Congress will need to vote to raise the debt limit later this year, and because the numbers are so large.

Mr. Obama‘s budget director said 2011 will see the biggest one-year jump in debt in history, or nearly $2 trillion in a single year. And the administration says it will reach $15.476 trillion by Sept. 30, the end of the fiscal year, to reach 102.6 percent of gross domestic product (GDP) — the first time since World War II that dubious figure has been reached.

In one often-cited study, two economists have argued that when gross debt passes 90 percent it hinders overall economic growth.

The president’s budget said debt as a percentage of GDP will top out at 106 percent in 2013, but only if the economy booms.

“I still don’t see a sense of urgency from the president about the massive federal debt,” said Sen. Lamar Alexander, Tennessee Republican. “His budget calls for too much government borrowing – even though the debt is already at a level that makes it harder to create private-sector jobs.” …

The article continues at The Washington Times.

Update: Ryan calls budget ‘big disappointment’

President Obama’s 2012 budget plan, according to the White House, aims to trim the federal deficit by more than a trillion dollars over the next decade, with two-thirds of the reductions from spending cuts, and the other third relying on increasing federal revenue by limiting certain tax deductions and special- interest tax breaks. But Wisconsin Congressman Paul Ryan, chair of the House Budget Committee, is astounded. “I’ve never seen anything like this before. In a nutshell, I call this one big presidential punt, because the biggest threat to our economy these days is our debt and our deficits,” Ryan told WRJN. “Big deficits today simply means more tax increases tomorrow and higher interest rates.”…

And video of the Congressman, President’s Budget a Test of Leadership

Update 2: Obama Unveils $3.73 Trillion Budget For 2012 That Includes $367 Billion in Tax Hikes at GatewayPundit

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