America’s Greek Fiscal Future

“Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate,” writes Tom Goodwin, senior vice president of strategy and innovation at Havas Media.

“Something interesting is happening,” he adds.

While something of interest is happening to business via the Internet, none of it does much for the U.S.’s Gross Domestic Product (GDP) or the U.S.’s mounting debt.

The percent of GDP debt hit its peak in 1945 and 1946, when it was 104 percent and 106 percent. In 1953, at the height of the factory economy, manufacturing accounted for more than 28 percent of America’s GDP.

Employment in manufacturing peaked in 1979, when nearly 20 million Americans worked in the sector. That figure had shrunk to 11 percent by 2009 with around only 12 million manufacturing jobs in the U.S.

The Congressional Budget Office (CBO) estimates that by the end of 2015 the U.S. government debt held by the public will be 74 percent of GDP. That’s higher than the 69 percent of GDP debt the U.S. government had in 1943.

Furthermore, the CBO projects the debt held by the public will increase to 103 percent GDP that by 2040. The projected increases are based in mandatory federal spending for entitlement programs including Social Security, Medicare, Medicaid and Obamacare subsidies.

The current debt held by the public is someplace north $13 Trillion and the debt existing between the different government agencies is over $5 Trillion. That equals a debt of more than $18 Trillion.

Without the manufacturing of real products and the export of the same – the U.S. is soon to look like Greece – a nation sinking in a sea of red ink and relying on a bailout from other nations.

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