This is the third consecutive month the debt burden has dropped—this time to 64.2% of GDP (from 64.6% last month).
We should not expect that trend to continue. The reason it’s been dropping is the combined effects of (a) higher GDP growth generating higher tax revenues, and (b) taxpaying season, which can create a short term minibubble in federal tax receipts. In any case, the inflation number dropped slightly to 2.9%—good news for now—and real GDP growth turns out to be higher than the BEA had previously estimated, just as I suspected two months ago.
Bottom line: My estimates of GDP and debt indicate that the USA's debt burden will be 65.2% GDP at year-end. (See the new National Debt Microscope for a diagram of that.)
Below is the updated National Debt Thermometer. Canada readers might be interested in proceeding to the next image as well. Reason: I’ve received three emails questioning the magnitude of Canada’s number, so I added a screenshot of the OECD table showing where the number came from. (Lastly, if you’re interested in the detail, please see my final comments regarding data sources.)
Below is the screenshot of the OECD table. Click to enlarge.
Final comments on data sources
Currently, I use OECD numbers if they are available for a given country; if not, I use the number in the recently-updated CIA World Factbook. However, I’ve noticed a few minor differences between the two sources; therefore, in the interest of consistency, I am seriously considering making the Factbook the sole source for non-USA numbers. (For the USA, I can derive a more timely number from other sources.) I’ll probably make that switch next month. For now, the Thermometer numbers are dual-sourced.
