Forget Europe, the US budget is out of control – By Mikkel Roland Egesberg – So you think things look bad in Europe? Let’s try looking at the US for a moment:

Above I have looked at the US budget from 1970 to 2011, and as you can see the US federal “outlays” are near an all time high at 24,1% of the US GDP, while the “receipts” are near an all time low at 15,4% of GDP.

Below we see the net effect, a budget deficit of 8,7% of GDP for the year 2011, down from 10.1% in 2009. The last years show the largest budget deficits in the history of the US since 1950…

In comparison the Eurozone budget deficit as % of GDP is just 3,2%, almost a third of the US budget deficit… Below you see the US federal debt as % of US GDP:

As you can see, the US debt to GDP ratio is expected to be around 104% in 2012. Compare this around 91% for the Eurozone, and just 86% for the EU average(EU-27).

Things are much worse in the US, but their monetary policy hides the problem. The US Federal reserve is printing money and buying up US bonds to keep interest rates low. If ECB did this too, there would be no “Eurozone crisis”, but perhaps higher inflation. Do read: Why the Eurozone has problems and the US not – Less Talk, More Facts

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