According to a new report from Bloomberg, U.S. debt is now at it’s lowest level since 2006.
Total indebtedness including that of federal and state governments and consumers has fallen to 3.29 times gross domestic product, the least since 2006, from a peak of 3.59 four years ago, according to data compiled by Bloomberg. Private- sector borrowing is down by $4 trillion to $40.2 trillion. [...]
Consumer debt declined to $11.4 trillion at the end of the second quarter, from a peak of $12.7 trillion in 2008. The market for commercial paper, a form of short-term corporate IOUs, has shrunk to $975 billion from a record $2.22 trillion in July 2007, central bank data show.
Net U.S. taxable debt issuance, which includes corporate, mortgage and Treasury securities, is forecast to fall to $821 billion in 2012, the least since 2000 and less than half the record $2.28 trillion in 2007, according to Ira Jersey, an interest-rate strategist at Credit Suisse Group AG in New York. The firm is one of 21 primary dealers that trade directly with the Fed and is obligated to bid at Treasury auctions.
According to the Congressional Budget Office, the deficit (not to be confused with the national debt) will fall below $1 trillion to $901 billion in 2013. And under the baseline established in the Budget Control Act, the deficit will almost entirely vanish by 2017.
Just as it did under President Clinton, it will take two terms of the Obama administration to return to a time of budget surpluses. But if Mitt Romney becomes president, a man who is pledging to increase defense spending by $2 trillion while cutting taxes across the board by 20 percent, you can forget the idea of a balanced budget or a budget surplus.