We Are So Screwed: Federal Financial Analysis

[Brainwalter]

The main difference is that GNP includes all the revenues of multi-national American companies while GDP must be solely derived from domestic sources. They're not that divergent and I tend to think of them pretty interchangeably in contexts like this.

[natedogg]

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I need not repeat that even if every single one of us watches out for our own retirement that the economy will still hit the skids as a result of a sudden end to entitlement programs.

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This is far from being a given. In fact, I am not even sure how this makes sense. If anything, the end of entitlements will spur the economy as more people work longer.

natedogg

[Mickey Brausch]

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I might point out that the percentage of current debt compared to the GNP is less than 3% today according to the GAO. This is lower than anytime in the last 50 years.

[/ QUOTE ]Although it is indeed generally good to owe money long term rather than short term, and the U.S. has seen a shifting of its debt towards the long term horizon, the sum of short-term debt (current debt) and long-term debt, otherwise known as national debt, continues to be at uneasy highs. Here's a graph of national debt as percentage of GDP. Note that the only recent period it's dipping is during the Clinton presidency:


Also, here's the graph for total credit market debt as percentage of GDP. Total credit market debt double-counts debt between banks and other institutions, incl. the gov't, but this is useful because it highlights the domino-effect risks of institutional defaults:

All in all, ahead it's getting interesting. (Excuse the pun.)

Mickey Brausch