US National Debt

I wrote a long essay here on the US National Debt.

US National debt is currently, $9.7trillion. It is forecast to rise to, at least, $11.3tn (possibly more with financial bailout by the end of 2009. In the coming years, the National debt could become an ever increasing burden for the US economy. This is because:

• Cyclical downturn reduces tax revenue and increases spending
• Long term demographic trends which create additional demand on government spending, especially health care and pension commitments.
• Financial bailout. There is much interest in the $700bn bail out; it will definitely worsen the National debt, if the government take responsibility of mopping up the bad loans from the banking system.