TOTAL FEDERAL GOVERNMENT DEBT & UNEMPLOYMENT RATE
However if you overlay a chart of the year over year percent change of the Federal government's total debt onto the chart of the unemployment rate the correlation becomes obvious.
TOTAL FEDERAL GOVERNMENT DEBT YEAR OVER YEAR PERCENT CHANGE & UNEMPLOYMENT RATE
Based on this undeniable correlation it goes without saying that when the unemployment rate begins to trend higher again (which I am certain it will) the rate at which the Federal government borrows money will also begin to trend higher again. When the unemployment rate goes back up to the 10% level that it hit in October of 2009 total Federal government debt will likely be at 20 trillion dollars.
And since GDP growth will slow along with employment it also goes without saying that total government debt will soon be way over 100% of GDP.
TOTAL FEDERAL GOVERNMENT DEBT & GROSS DOMESTIC PRODUCT
Dick Cheney supposedly told his Treasury secretary from Pittsburgh Paul O'Neill "Reagan proved that deficits don't matter", but any rational person knows that deficits do indeed matter because of the interest that has to be paid on them.
Here's a great article from The Los Angeles Times explaining why the Federal government being 20 trillion dollars in debt will indeed matter:
"Why is this situation so serious? First, we are headed for a level of debt that within a decade could require us to spend the first trillion dollars of every year's federal budget servicing that debt. Much less money will be left for other things. That is a prescription for a vicious cycle of underfinancing for our infrastructure, national education efforts, science research and all the other functions of government that are crucial to long-term economic growth. Robust defense spending will be unsustainable too. Once we get in this rut, getting out will be very hard."
