Friday, July 18, 2008

Update: The $10 Trillion Man?

by Bill McBride on 7/18/2008 05:56:00 PM

Several years ago I predicted that the National Debt would reach $10 trillion by the time President Bush left office. For a short period (thanks to the housing bubble), it looked like the deficit would be less than I projected.

Now that the housing bust is hitting government revenues, it looks like the $10 trillion projection will be close.

The current National debt is $9.518 trillion (see TreasuryDirect) as of July 17, 2008. That leaves the debt about $482 billion short of my projection with about 6 months to go.

Last year, from July 17, 2007 to Jan 20, 2008, the debt increased $297 billion. That is not a fast enough pace to make $10 Trillion by next January. But the debt is increasing faster this year.

The increase in the debt was about 50% higher over the first half of 2008 compared to the first half of 2007. If that pace continues for the next 6 months, we can estimate the debt will increase another $297 billion * 1.5, or $446 billion, before Bush leaves office.

$10 Trillion Man? It is going to be close!