The Dallas Federal Reserve has published an estimate of the costs of the recession that began in 2007/8 and intensified through the next two years. The report can be found at:

http://dallasfed.org/assets/documents/research/staff/staff1301.pdf

Their estimate is that the cost from 2008 to 2023 will be between $6 trillion and $14 trillion. The high figure is equivalent to the GDP for a single year. Economics is an imprecise science, but this provides a convincing argument that the contraction was far worse than the average recession and that its effects will last must longer than average.

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Every American president has added costs to the debt that we all must pay and people do nothing about it. The debt grows and grows. We are also on the verge of needing to invent a new widget. The widget factories have sold so many now that most people don't need a widget, so there you have two reasons our economy has went to hell. A quick fix would involve a special tax to go into a fund to pay the enormous debt but that wouldn't work. Congress would just borrow the money!

What increases the debt the most are war costs and that may be one reason people are not as concerned as they might be. The other is that as the population grows and the economy expands the debt represents a smaller fraction of GDP and hence is less likely to be a problem.

The more immediate problem is the cost of debt service as a portion of the budget. Failing to increase the debt ceiling and have the country's credit downgraded greatly enhances that cost.

Here's how I deal with the current economy and I tell people that I know the same thing. The current 20 dollar bill is the new 5 dollar bill. The current 5 dollar bill is the new 1 dollar bill. You could carry that a little higher but I'm "small potatoes" in the money field. (My total investments have made about $500 so far this year.) None of this fixes the national debt but it's a good way of the average man seeing todays money. It's simply inflation which means loss of money value.

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