

America has ‘reached the point of no return,’ Reagan budget director warns - chailatte
http://www.rawstory.com/rs/2011/01/america-has-reached-the-point-of-no-return-reagan-budget-director-warns/

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Umalu
Government debt is a deferred tax on a country's citizens and their
descendants. So it can be a real drag on future growth and, like credit cards,
feels cost-free until the bill comes due. What's more insidious is that it is
often run like a Ponzi scheme, in which current citizens benefit at the
expense of their descendants.

But it is hard to say where the "point of no return" is for the U.S. Many
countries have higher government debt as a percentage of GDP than the U.S.
([http://en.wikipedia.org/wiki/List_of_sovereign_states_by_pub...](http://en.wikipedia.org/wiki/List_of_sovereign_states_by_public_debt)).
Some of these high debt countries have reached their point of no return
(Zimbabwe, Greece, Sudan) while others have not (Japan, Singapore). The U.S.
is richer than all these countries and also has the advantage of a de facto
worldwide dollar standard, so the U.S. is better able to withstand high debt
loads than most countries. But then that's like saying the U.S. can afford to
run up a huge credit card bill. The U.S. will feel richer than it is while
charging, and the U.S. will be much poorer than it is once it pays it off.

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Someone
The U.S. has the advantage of a relatively (for a developed country) high
population growth rate of around 1% a year
([http://en.wikipedia.org/wiki/Demographics_of_the_United_Stat...](http://en.wikipedia.org/wiki/Demographics_of_the_United_States))

A growing population helps in keeping per capita debt (or its growth) down.

The downside of this, of course, is that the U.S. needs a 1% GDP growth each
year to prevent its population from getting poorer.

