We are running out of people willing to finance our reckless spending.


U.S.’s $13 Trillion Debt Poised to Overtake GDP: Chart of Day




By Garfield Reynolds and Wes Goodman

June 4 (Bloomberg) -- President Barack Obama is poised to increase the U.S. debt to a level that exceeds the value of the nation’s annual economic output, a step toward what Bill Gross called a “debt super cycle.”

The CHART OF THE DAY tracks U.S. gross domestic product and the government’s total debt, which rose past $13 trillion for the first time this month. The amount owed will surpass GDP in 2012, based on forecasts by the International Monetary Fund. The lower panel shows U.S. annual GDP growth as tracked by the IMF, which projects the world’s largest economy to expand at a slower pace than the 3.2 percent average during the past five decades.

“Over the long term, interest rates on government debt will likely have to rise to attract investors,” said Hiroki Shimazu, a market economist in Tokyo at Nikko Cordial Securities Inc., a unit of Japan’s third-largest publicly traded bank. “That will be a big burden on the government and the people.”

Gross, who runs the world’s largest mutual fund at Pacific Investment Management Co. in Newport Beach, California, said in his June outlook report that “the debt super cycle trend” suggests U.S. economic growth won’t be enough to support the borrowings “if real interest rates were ever to go up instead of down.”

Dan Fuss, who manages the Loomis Sayles Bond Fund, which beat 94 percent of competitors the past year, said last week that he sold all of his Treasury bonds because of prospects interest rates will rise as the U.S. borrows unprecedented amounts. Obama is borrowing record amounts to fund spending programs to help the economy recover from its longest recession since the 1930s.

“The incremental borrower of funds in the U.S. capital markets is rapidly becoming the U.S. Treasury,” Boston-based Fuss said. “Do you really want to buy the debt of the biggest issuer?”

http://www.bloomberg.com/apps/news?pid=20601109&sid=aa0cI64Gx.4E&pos=15

Constitutional amendment limiting spending to what we can pay for each year fixes the problem.....and that is the only way Congress won't OVERSPEND.

NO, but there is always bankruptcy and sticking it to the Chinese!

What gets me is that it's just numbers on a peice of paper. It really isn't 'real', the money isn't anything but numbers, we're so hoodwinked into beleiving that this peice of paper gets this, that one with different numbers gets that....hahahaha

whoever dies with the most incredible pile of debt WINS

And every major Empire falls for the same fiat money trick! "Those who do not learn from history are doomed to repeat it."