The outgoing Secretary of the U.S. Treasury, Timothy Geithner has issued the Citizen’s Guide to the 2012 Financial Report of the United States Government. There are two charts in the report that fully summarize the nation’s fiscal situation, which Geithner indicates should be considered together. Here they are:
In this first chart, we see that the Obama administration projects that the nation’s revenues from tax collections will be rock steady into the future, while spending because of interest payments on the nation’s excessive level of national debt skyrocket. The second chart Secretary Geithner want U.S. citizens to consider with this first chart shows the national debt is projected to grow as a percentage of the size of its economy:
Taking the two charts together, what Secretary Geithner would seem to be projecting is a national debt death spiral – where interest rates rising above today’s rock-bottom levels make it increasingly necessary to borrow even more money to make interest payments on the national debt.
Of course, even the optimistic scenario depicted in the charts above only hold true if the Obama administration’s economic projections are any good. Their track record to date is one of being exceedingly optimistic....