ZeroHedge points out that the amount of U.S. debt outstanding has just surpassed the latest reading of our gross domestic product:
There is nothing quite like a $70 billion debt auction settlement at the last day of a month to bring total US debt to a record $15.692 trillion, which happens to be just $600 billion shy of the $16.394 trillion debt ceiling … And now that we know what Q1 GDP was at the end of Q1, or namely $15.462 trillion, it is simply math to divine that today alone total US/debt to GDP rose by 50 bps to a mindboggling 101.5%.
Now there is a whole school of thought, which counts New York Times columnist Paul Krugman among its leaders, that says that despite the amount of debt the federal government has incurred, more government spending and debt are needed given the stagnant state of the economy. Krugman elaborated on this idea in a recent interview with Julian Brookes of Rolling Stone:
A lot of people find emotionally unacceptable the idea that economic suffering on this scale could have a relatively trivial cause. But this has happened again and again through history. And it could be fixed fairly easily, by having government step in and spend.
The U.S. economy sits on a knife’s edge of slowing growth coupled with increasingly heavy debt loads. Fitch Ratings issued a report yesterday saying that U.S. fiscal policy likely increased growth by about 4 percent over the past two years through debt-financed stimulus spending and tax cuts. However, the report drew no firm conclusions about future policy: