Denial

Welcome to the recovery !

U.S. debt is now equal to economy

The amount of money the federal government owes to its creditors, combined with IOUs to government retirement and other programs, now tops $15.23 trillion.

WASHINGTON – The soaring national debt has reached a symbolic tipping point: It's now as big as the entire U.S. economy. 

"The 100% mark means that your entire debt is as big as everything you're producing in your country," says Steve Bell of the Bipartisan Policy Center, which has proposed cutting nearly $6 trillion in red ink over 10 years. "Clearly, that can't continue."

That's roughly equal to the value of all goods and services the U.S. economy produces in one year: $15.17 trillion as of September, the latest estimate. Private projections show the economy likely grew to about $15.3 trillion by December — a level the debt is likely to surpass this month.

Long-term projections suggest the debt will continue to grow faster than the economy, which would have to expand by at least 6% a year to keep pace.

President Obama's 2012 budget shows the debt soaring past $26 trillion a decade from now. Last summer's deficit reduction deal could reduce that to $24 trillion.

Many economists, such as the Brookings Institution's William Gale, say a better measure of the nation's debt is how much the government owes creditors, not counting $4.7 trillion owed to future Social Security recipients and other government beneficiaries. By that measure, the debt is roughly a third less: $10.5 trillion, or nearly 70% the size of the economy.

That is still high by historic standards. The total national debt topped the size of the economy for three years during and after World War II. It dropped to 32.5% of the economy by 1981, then began a steady climb underPresident Reagan, doubling over the next 12 years. The combination of recession and stimulus spending caused it to soar again under Obama.

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