Bad Effects Of Excess Debt Have Already Happened

The world is obsessed with the problem of too much debt and the threat it poses to the civilized world. Greece is very likely to default on its debt, and so are Ireland and Portugal. Meanwhile, the U.S. wrestles with its own burden of debt. Total outstanding debt owed by the U.S. government to the public now stands at $9.75 trillion, or about 64% of GDP. Thatâ??s the highest level of federal debt relative to the economy since the early 1950s, when the U.S. government was working off its huge debt (well over 100% of GDP) incurred while fighting WW II. If the federal deficit continues at the current level of 9-10% of GDP, total debt will exceed 70% of GDP one year from now, and eventually it could exceed GDP.