Conclusions

We have seen that the us government debt is growing, but so is the GDP. However the GDP is not growing as strong in recent times due to the economic crisis. Second to that, the government income from GDP is relativley low. If the GDP starts growing again and the government can profit more from that, debt level can return to normal. Although it is high at the moment, there have been times where it looked worse. In addition the historical bond rate is very low, allowing the government to lend money at very good conditions. However if the GDP does not grow and the interest rates rise, it would increase the burden at big times.

The structure of the bond holders is also a factor, around 30% of the us government debt is hold by foreign nations which could create political pressure, china and japan are the greatest creditors. However these are not politically coupled, so there is no big front which would press against the US.

The amount of us government debt is big, but not overwhelming. If we look back in history, the US has survived higher debt ratio and inflation rate without need to declare default. This means that the US is still seen as good lender and the amount of bonds can increase, and may still be dealt with if the economic crises dwindles in the next years.