BY THE NUMBERS
To set the stage for the emergence of hyperinflation, we need to look at two basic numbers: gross debt, and gross domestic product (GDP). Without getting into complicated economics, the terms are simple to understand. Gross debt is how much the nation owes, while GDP is how much the nation earns. It doesn’t take an economist to figure out that if you spend more than you make for years on end, you’ll be in bad shape.
| Gross Debt (billions) | GDP | |
| 2006 | $8,506 | $13,377.20 |
| 2012 | $16,400 | $15,724.00 |
Basically, since 2006, our debt has increased by a staggering amount – 92.8%!!! And note the fact that our income (GDP) has not risen at the same rate – in fact, it has only risen a little bit in relation to the debt. Why is this important? Because the revenue the government makes through taxation is based on the GDP. They can only tax what people earn, and if people’s earnings aren’t increasing in relation to the debt, trouble comes shortly thereafter.
