In a dispiriting sign of the times, today marks the date when US government debt passed American GDP.
The story, noted in the financial blog Zero Hedge, includes a graph on the sovereign entities buying our nation's debt (hint: it's not the People's Republic of China.)
It is incredible to think that the United States now sells more more federal debt instruments than economic production can cover. What's more disturbing is that there is no sign whatsoever that this grim trend will slow down, flatten, or reverse its slope. The train will keep on rolling, until it becomes a train wreck.
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| Fannie Mae's Washington, DC headquarters |
In a related story, the Washington Post noted details about a federal agency's plan to scale back Fannie Mae and Freddie Mac. This development, treated as a ho-hum article, was literally unthinkable a decade ago, even by the most ardent GOP congressman. Now, the twin housing behemoths are symbols of the housing disaster, a calamity whose ripples Americans are just starting to really feel. Yet this home-grown financial Pearl Harbor, more than any other episode during the disastrous first decade of the 21st Century, has shamefully brought our country to its knees.
Of course, if you count purchases of cell phones, tablets, and drones, we're doing just great.
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