They put the danger zone at a debt-to-GDP ratio of 90%. Once it reaches 90%, they found, a turning point arrives…At that point, a dollar of debt yields less than a dollar of output. Debt becomes an actual drag on growth. Again the current U.S. debt-to-GDP ratio is 106%.
We are deep into the red zone, that is. And we’re only going deeper. The U.S. has a 106% debt to GDP ratio, trillion dollar deficits on the way, more spending on the way. We’re getting more and more like Greece. We’re heading for a sovereign debt crisis. That’s not an opinion; it’s based on the numbers.