At a recent investment conference in Miami Florida, David Stockman, the former budget director under President Reagan, pointed out that the on, and off balance sheet liabilities of the US government are somewhere between $75 and $80 trillion.
He also talked about the fact that private savings in the US have increased to around $500 billion a year.
If the US government were an ordinary household it would owe the equivalent of $80,000 in debt, however its disposable income would be just $500 per annum.
In a separate interview Mr Stockman said, “The federal government is not getting its financial house in order. We are on the edge of a crisis in the bond markets. It has already happened in Europe and it will be coming to our neighborhood soon.”
The Eurozone might be at the epicenter of the global debt crisis today, but Japan will likely be next in line, followed by the UK, and then the US around late 2014 or early 2015.