WASHINGTON (AP) – The founding fathers left no legacy celebrated on the day of independence, but concerns all of us. And ‘the national debt.

The land for the first time in debt to help pay for the Revolutionary War. Always there, the debt is now at a staggering $ 11.4 trillion – equivalent to about $ 37,000 for every American. And it is the expansion of over 1 trillion dollars a year.

The mountain of debt could easily be the next full economic crisis, without decisive action by Washington, economists warn of all stripes.

“If we show a strong commitment to the sustainability of public finances in the long run, we have neither the financial stability of a healthy economic growth”, Federal Reserve Chairman Ben Bernanke told Congress recently.

Increasing taxes or reducing benefits of the federal government and services – or a combination of both – may be inevitable consequences.

The debt ratio has complicated efforts by President Barack Obama and Congress for the worst recession in decades and, as an incentive for saving in connection with the spending shortfall in tax revenue to bridge the gap.

Interest payments on the debt alone will cost $ 452 billion last year – the largest category of expenditures under the federal Medicare-Medicaid, Social Security and defense. E ‘rapidly crowding out other public spending. And the Ministry of Finance, it is difficult to find new donors.

The United States went into the red for first time in 1790 when it took $ 75 million in credits to the war, the Continental Congress.

Alexander Hamilton, the first Minister of Finance, said: “A national debt, if not beyond, will be for us a national blessing.”

Some blessing.

Since then, the nation was once free from debt 1834-1835.

The national debt is in times of war and usually in times of peace, during the stay on an upward trajectory in general. In recent decades, has dramatically – with the exception of a recovery starting from 1998 to 2000 compared to the budget, most of which would create an overheating economy.

The debt has risen with the war in Iraq and Afghanistan and economic stimulus spending under President George W. Bush and Obama now.

The odometer-style “debt clock” near Times Square – was introduced in 1989, when the debt is $ 2.7 trillion – has the numbers and had to be closed if the debts of the past, increased $ 10 trillion in 2008.

The clock was restored to the highest number of successful candidates. There are several debt clocks on websites of public interest groups, looking at hundreds, thousands, millions of zip in a matter of seconds.

The debt / GDP gap is “something that keeps me awake at night,” said Obama.

He has promised to balance the budget “deficit” about in half, by the end of his first term. But “deficit” simply means that the difference between revenue and expenditure over a year.

This year, the deficit is about $ 1.85 billion.

Deficit not holdover debt from previous years. Some expenses – such as emergency appropriations bills and receipts relating to social security program – are not included, or if they are part of the national debt.

The national debt is a broader and more to say, a look at the budget that the Government looks to the deficit.

After the Treasury Department, the number of updates “on the penny” every few days, the public debt was $ 11518472742288 Wednesday.

The total debt is now just over 80 percent of annual production of the entire U.S. economy, as measured by gross domestic product.

In historical comparison, it is proportionately higher in the Second World War, when it briefly rose to 120 per cent of GDP. But it is still a great responsibility.

The United States is not the only nation struggling with an enormous debt. Among the major countries, Japan, Italy, India, France, Germany and Canada have comparable debt as a percentage of GDP.

If the government does not borrow all this money?

The debt ratio is largely financed through the sale of government bonds and bills. Even today, including global economic turbulence, which is still considered one of the safest in the world of investments.

This is one of the few upside the U.S. government borrowing.

Treasury securities are suitable for individual investors and popular in other countries, particularly China, Japan and oil-exporting Persian Gulf, the three top foreign holders of debt securities of the United States.

But as the U.S. spends billions to stabilize the recession-ravaged economy, reduce the value of the dollar, securities less attractive investment. Some major foreign donors are already comparing back on their purchases of U.S. bonds and other securities.

And when the largest holder of U.S. debt were to flee, it would shock waves through the global economy – and strong valid U.S. interest rates.

Over time, the demographics suggest that worsen before getting better, even after the recession ends, as more baby boomers retire and start collecting Social Security and Medicare benefits.

While the president remains personally popular, polls, there is growing concern about its economic management and public debt of the mushrooms – and what it might mean for future generations.

If things can not be turned around, including the creation of a more efficient health care: “We are going in a completely non-fiscal policy,” said the White House budget director, Peter Ország.

Some activists budgetary restraint system claim that the debts of the nation states understand true liabilities.

The Foundation Peter G. Peterson, founded by a former secretary of trade and investment banker, thinks that the $ 11.4 trillion debt figure does not include approximately $ 45 trillion in liabilities to cover unlisted companies and pension and healthcare obligations.

This would be the nation all obligations of $ 56 trillion, or about $ 184,000 for every American, according to this calculation.

Treasury Department the “penny” of public debt breakdown: http://tinyurl.com/yrxrsh

Peter G. Peterson Foundation, an independent evaluation of government debt: http://www.pgpf.org/

“Deficits do not matter” debt clock: http://tinyurl.com/l6mvjb

Source:yahoo.com

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