Government Debt

Government debt is simply the amount of money owed by a government entity, whether it’s on the municipal, state, or federal level. Most often, government debt is referred to as the total debt owed by the federal government, otherwise known as the national debt.

Government debt in recent years has been the source of considerable concern as its size has increased significantly due to the Great Recession. Reduced economic activity and personal incomes reduced tax revenues to the government; this, combined with continued government spending, has produced significant annual deficits, which have contributed greatly to the rising national debt.

What’s often referred to as an important statistic regarding the national debt is the debt-to-GDP ratio, which represents an economy’s ability to service the debt on its books. The U.S.’ total debt-to-GDP ratio is now greater than 100%, significantly higher than its historical average over the last century.

Where the U.S. Dollar Is Headed and What It Means to You

By Monday, September 29, 2014

U.S. Dollar Is HeadedFor the U.S. federal government’s fiscal year, which ends this Tuesday, the Congressional Budget Office (CBO) predicts a budget deficit of $506 billion. (Source: Congressional Budget Office web site, September 26, 2014.)
But just because our annual deficit is declining, that doesn’t mean our national debt is rising by an equal amount…. Read More

Is This What America Has Come To?

By Wednesday, June 25, 2014

Five Years Later, Many American Still SufferingI’m going to put aside my daily ranting about the stock market and the economy today to bring what I believe is an important story to the attention of my readers.
There is no doubt you’ve heard about how poorly the city of Detroit, Michigan is faring now that the automotive sector has all but closed up there.
Yesterday, news came that the city has started cutting off water to about 150,000 people…. Read More

U.S. Credit Rating Downgraded to Same Level as Brazil?

By Thursday, October 17, 2013

171013_PC_lombardiThe U.S. government, after winning World War II for the Allies, was very convincing. It told central banks around the world that they should hold the U.S. dollar as their reserve currency instead of gold, based on the idea the U.S. dollar would be backed by gold. Only limited amounts of U.S. dollars could be printed, because the currency was tied to gold bullion…. Read More

China: The Trigger to Collapse Key American Stock Indices?

By Wednesday, July 31, 2013

310713_PC_lombardiWhy do only a few in the media and no politicians I can find seem to care about the warning bells being issued by the Chinese economy?
First, early this year, we heard the Chinese economy is going to grow at an embarrassingly slow pace in 2013 compared to its historical average. Forget a 10% economic growth rate and think seven percent or lower!
Now, we hear about more troubles…
Think the Detroit bankruptcy was bad news?… Read More

Growing American Business Inventories Paint Worrisome Picture

By Thursday, April 25, 2013

Growing American Business InventoriesThe biggest economic center in the global economy, the U.S., showed dismal growth in the last quarter of 2012. Sadly, the first quarter of 2013 is looking to be the same. Demand in the country is anemic at best as consumers are struggling.
New durable goods orders in the U.S. economy plunged 5.7% in March—the second decline in the first three months of 2013…. Read More