It's interesting that many people seem to have accepted that endlessly taking on more debt is a good idea. Debt has to paid off and you can't just take it on endlessly. I wonder what the future looks like if the United States continues to take on more and more debt. Right now we can't really pay it off ever so we're stuck servicing it forever. Seems like we're giving our children a much worse world than the one we were born in. When I was born the debt was pretty manageable and over the course of my lifetime it exploded to something that's basically never going to be paid off.
It is worth to point out that one is a stock (debt) and one is a flow (GDP), and the right way of comparing them would be by taking the net present value of the flow, or comparing the cost of servicing the debt per year to GDP (so debt servicing cost climb to x percent of gdp).
A dumb question - isn't the GDP a per-year figure whereas the debt a total figure? ... so doesn't it simply mean that if all GDP goes to paying off the debt, it will necessarily take more than 1 year. That pay off period is increasing and about to cross the 1 year threshold, but I'm not getting the "debt cycle" concept .. in other words what is the difference between 1year-delta and 1year+delta?
Like anything else in America we're going to need a crisis for anyone to even consider doing something to resolve the problem. It seems to me that a drastic cut in military spending, raising the retirement age to 70, raising taxes on <i>everyone</i>, closing tax loopholes, and an across the board cut of 5%-10% should be a good start to get this resolved in the next 20 years.
I think the difference today is that everyone is using fiat currency, and the markets for commodities potentially useful as a medium of exchange (gold, oil, etc) are too volatile.<p>We've already been living with slow inflationary growth, despite the nonsense spewed by the government. In 1985, a single wage-earner could support a middle-class family. In 2005, two parents need to work, mostly to pay a mortgage and pay a few minimum wage earning daycare workers.