Today our national debt stands a little over 12 trillion dollars according to treasurydirect.gov, and the gross domestic product of the United States is estimated to be approximately 14.4 trillion as of 2008 (cia.gov, 2009). Projections by the current administration estimate that the national debt will rise to around 14 trillion dollars in the next 2 years, bringing our national debt as a percentage of GDP to a staggering estimated 82%, numbers not seen since the end of World War II (Washingtonpost.com, 2009).
The U.S. was able to recover from the massive debt load in the 1940's due to the fact that a majority of the industrializes nations had been bombed into oblivion. Today, this is not the case. With the consolidation of economies within the European Union, and the rise of China and India, the United States does not have the "fortune" of being the only modernized and technologically advanced economy.
According to the Treasury Departments own numbers as of October 2009, China is the largest foreign holder of US debt at 798.9 billion dollars, with Japan a close second at 746.5 billion. The balance of the 3.498 trillion dollars is held by many other foreign governments. This is a staggering number considering that as recently as 2002, the US debt was only 6 trillion dollars. How can the United States expect to have any political influence with this kind of debt?
From a historical perspective, the Weimar Republic could be a look to the future of our economy. Between 1914 when the Weimar Republic moved from a gold backed currency, and 1923 at the height of the hyperinflation of the German Mark, the German government printed money in an effort to pay off their reparations debt that came with the surrender and the Treaty of Versailles....