by Simon Black

When you hear two politicians in the US going toe to toe arguing about public finances (i.e. money that isn’t theirs), they’ll often cite numbers published by the Congressional Budget Office (CBO).

In political circles, the CBO is considered an honest broker… an objective referee that simply presents the facts without taking a position on the numbers.

As such, it’s usually interesting when the CBO publishes something new about the macro situation of the world’s largest economy.

Today they’ve released an infographic showing America’s debt to GDP ratio over the last 100-years, through World War I, the Great Depression, World War II, the Nixon Gold shock, and the Global Financial Crisis. (click to enlarge)

[As a note, this graphic only shows 'federal debt held by the public' expressed as a percentage of GDP. Total federal debt, including debt owed to the Federal Reserve and intragovernmental agencies like Social Security, is much higher.]

It’s really amazing to put in context how much debt levels have risen since (a) the creation of the Federal Reserve in 1913, and (b) Richard Nixon ending dollar/gold convertibility in 1973.

I suspect that our savvy readers will not find this coincidental.

For what it’s worth, both of the CBO’s scenarios for future debt growth seem absurd; in the ‘baseline’ case, they assume that the economy grows, spending falls, debt falls, and the unicorns come out to play in the sunshine.

Continue reading: http://www.sovereignman.com/expat/presenting-the-cbos-long-term-out...