Part 1: USA – The World’s Largest Economy, Some Figures and Stats, the Debt and the Debate Around the Budget.

Launch Full Replay of Webinar

See Part 2 of this Webinar Here: Part 2: GDP Components – Consumption, Investment, Government, and Trade
See Part 3 of this Webinar Here: Part 3: Key US Macro Indicators

1. USA – The World’s Largest Economy

• GDP: $14.72 trillion (2010 est.)
• GDP Growth Rate: 2.8% (2010 est.)
• Labor Force – 153.9 million –9.1% unemployment rate
• Breakdown of Economy:
  –services: 68% (2010 est.)
  –goods producing: 17%
  –government: 13.6%

2. USA Economy Compared to Other Countries

3. Money Supply, Domestic Credit, Market Value of Shares

• GDP = $14.72 trillion
• Stock of narrow money – $1.74 trillion (Dec ‘10)
• Stock of broad money – $12.39 trillion (Dec ‘09)
• Stock of domestic credit – $32.61 trillion (Dec ‘09)
• Market value of all equities – $15.08 trillion

a. narrow money – A measure of the money supply used by the various central banks that includes only currency in circulation and very near money instruments. In the Federal Reserve System, narrow money includes all physical currency and deposits in checking accounts. It does not include savings accounts, certificates of deposit, or money market accounts. This is called narrow money because it applies the most restrictive definition of money. It is also called the money base or M1.

b. broad money – It generally includes demand deposits at commercial banks, and any monies held in easily accessible accounts. Components of broad money are still very liquid, and non-cash components can usually be converted into cash very easily. The most commonly used measure of broad money is M2, which includes currency and coins, and deposits in checking accounts, savings accounts and small time deposits, overnight repos at commercial banks, and non-institutional money market accounts. This is the main measure of the money supply, and is the economic indicator usually used to assess the amount of liquidity in the economy, as it is relatively easy to track.

4. The Debt, Debt Ceiling Vote and the Budget Debate

• Gov’t debt – $13.6 trillion – (for 2010)
• for 2010, debt/GDP = 93.25%
• Currently, debt is near $14.196 trillion (Feb ‘11) and a vote needs to be held to raise the debt limit from $14.3 trillion.
• US Congress also currently “debating”/fighting over current budget. Passed an extension so no government shutdown is needed, but still uncertainty remains there.

A. Debt to GDP Ratio By President

B. Total Accumulated Debt By President

C. Annual Increases to Debt By President Through ’06

See Part 2 of this Webinar Here: Part 2: GDP Components – Consumption, Investment, Government, and Trade
See Part 3 of this Webinar Here: Part 3: Key US Macro Indicators