A bigger trick is to count $2.627 trillion in "equipment depreciation" as current year GDP income. Equipment depreciation is the number that corporations pick for corporate tax forms as a corporate tax deduction. In 2014, corporations wrote down $2.627 trillion as a number on tax forms to deduct from their profits, so that corporations did not have to pay taxes on that $2.627 trillion. The actual $2.627 trillion is for equipment that was purchased years ago (or decades ago). None of the $2.627 trillion in equipment depreciation went into the economy in 2014. None of the $2.627 trillion in equipment depreciation was income (or spending) in 2014, but the Federal government accountants liked counting $2.627 trillion in equipment depreciation in 2014 as income because it makes the USA's GDP number look bigger by $2.627 trillion. Another clever trick to try to make the US GDP figure look bigger, huh?
When we subtract equipment depreciation ($2.627 trillion) and R & D spending that was counted twice ($0.5 trillion), we get the real USA GDP figure of $13.85 trillion for 2014.
100% government debt to GDP is considered to be the percentage where countries collapse from too much governmental debt. Government figures of $18.5 trillion debt divided by $16.98 trillion GDP yields 109% government debt to GDP in the USA, a little over the 100% threshold for a country to collapse from too much debt.
Greece was at just over 100% government debt to GDP in 2008 when their slow motion economic collapse began. By 2015, their economy has declined so much that it's 180% government debt to GDP in Greece.
But, the US Federal government owes $49.832 trillion and the US GDP is only $13.85 trillion, truth be told. 49.832 / 13.85 = 360%. Government debt in the US is at 360% of the US's GDP which is past the point for a collapse for any country.
The economic collapse, which has only just begun in the USA, is past due. Accounting tricks and fake numbers repeated often have tricked many people into thinking the debt problem in the USA isn't as bad as it is. Truth be told, the debt problem in the USA is worse then US government officials have been telling us. And it's going to get much worse as wall street's debts pile on during the current wall street meltdown.
If GDP contracts 10% during the first year of the USA's final economic collapse, then GDP will decline to $12.5 trillion in 2016. If only 10% of the US derivatives go bad in late 2015-2016, then only $31.5 trillion in bad wall street debt will get added to the $49.742 trillion that the US government owes. Bottom line: $81.242 trillion owed / $12.5 trillion GDP will equal 650% US government debt : GDP. Just 16 months into the USA economic collapse, the USA will be much worse off than European Union Member Greece is seven years after their economic collapse began. But, Greece has been getting help from countries like Germany and France with it's debts.
In my first article, in this USA debt bombs bursting series, titled "Silent Run in Puerto Rico", I gave a snapshot of Puerto Rico's 2015 debt collapse as a snapshot of what's coming soon to the USA as a whole.
(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).
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