out of digits

For those that scoffed at my posts (here and here) about the US savings rate falling below zero (written during the summer of 05′) here’s another, somewhat less scientific data point (not that the skeptics need further convincing these days). The National Debt Clock which counts the total national debt (not consumer debt, but that of the government) ran out of digits a few weeks ago.  Oy.

  • AlwaysThunking

    And just wait until the spiraling entitlement costs (Social Security and Medicare) start to eat up the budget. Time to raise taxes and cut costs big time.

  • http://www.marktomarket.typepad.com Mark

    Mr. Levine, I think in all of these posts, the most likely variable affecting this data has been overlooked. This is all about demographics, specifically the aging population. Refer back to Modigliani's Life Cycle Hypothesis (aka Permanent Income Hypothesis), which (among other things) says that an aging population will ultimately lead to declines in saving. While there are a lot of challenges with this model in conventional macroeconomic theory, most economists agree that the negative saving in the US has to do with the population demographics. Since we've not even entered the true aging of the Baby Boomers, this will only get worse. As to the previous comment, the impact of raising taxes will be dramatic, but not in a good way. Use the situation in Japan as an example, which Paul Krugman has written about thorourghly.