The Locomotive Of Growth Is Gone

I don't think it makes any sense to compare the debt situation this country faced at the end of WWII with the debt situation currently. The US was not running an annual account deficit in 1945, and we did not begin to run one until the late 1980's. We produced for ourselves. Even during the great depression, we produced for ourselves. Today, we borrow to import what we use. The US has the largest trade deficit on Earth. The interest costs alone on the accumulated loans that have financed this appetite for imports are in the hundreds of billions, and compounding.

The growing costs of the loans that support our addiction to imports must be considered in any evaluation of our debt crisis. At 6% of GDP, the current annual account deficit is bigger than the level that brought Argentina into collapse. Mexico got to 8% before its last collapse.

We no longer have the locomotive that pulled us out of debt after WWII. It's been shipped overseas.