The foreign debt can always be defaulted on by issuing a new currency. By deflating the US currency, the foreign debt is automatically decreased in value. China deliberately keeps its currency rates under valued  which gives it international competitive advantage. China floods the world market with cheap goods , the US is the world's main consumer. 

US has a population equivalent to only 5% of the world's population. However it accounts for 40% of the world's consumption. China and India populations are both around 4 or 5 times larger than the US population. 

India and China  should emerge as the next super powers to take over from the US. 

The same problem of today lead to the Great Depression. Poor class(slaves) and the few rich elites(masters). The middle class only appeared between 1930 and 1945 as a result of government regulations. The middle class is rapidly disappearing in the America. Lose your home and your job and you are back to being a pauper.

The neo-liberal economic reforms from 1979 onwards has resulted in  a more unequal distribution of wealth. The corporate fat cats are getting larger and larger pay increases at the expense of the workers. Emergence of shadow banking system- unlimited easy credit with a Fiat Capital system. Investors gambling in high risk products in derivatives and housing markets. The global financial derivative system has around $1.5 quadrillion invested into it.

Neo-liberalism was made popular with the emergence of Thatcher and Reagan in the late 1970s. Neo-liberal economists are fanatical free market fundamentalists and market deregulations. It is the economics of destruction. Neo-liberalism is nothing more than snake oil economics. If something sounds too good to be true it must be a scam. 

I am not sure what your talking about is what that chart is calculating. It's calculating spending by the government vs GDP, not the spending budget. If we budget 1 trillion, but spend 1.5 trillion, I think that chart would show 1.5 trillion in spending.

Regardless, add the 500 billion for the war for Bush, and he is still way behind what we are spending now.

The massive IR reforms have resulted in high unemployment rates and massive amounts of jobs in the unskilled and skilled sectors being sent offshore to cheaper labour market in the developing nations. 

Flexible IR laws during an economic downturn resulted in huge job losses. The same sort of economics was used prior to the Great depression but it has been given a new name. Neo-liberalism sounds like a feel good name but it hides a dark cynical force.  

Counter the US Corporatism(neo-liberalism) by joining a trade union. There is a catch to unions you must have a job to join one and the union fees is insurance for job protection and representation. Legal fees for an individual cost a lot more than the costs of joining a union. 

During the 1960s both the US and Canada had around 30% of their workforce in trade union movements. 40 years later the US has only 12% of its workforce in a trade union. The inequality and growth between the rich and the poor has grown and the middle class in the US is disappearing. 

Join a union, the membership is well worth it. Unions protect your job, rights and entitlements and have representation. Union members usually get paid higher wages than non-union workers who can be fired and sacked at the drop of a hate. There is a catch you need a job to join a union, but these occurring fees are worth it. Unions = work insurance, job protection and income protection.

The millionaires and billionaires distort the income distributions significantly. GDP income average takes into account all the billionaires incomes which make the government figures look so much better than reality.

Not quite so simple. I understand your point of view being a European where most Europeans are trained for and have a job for life.

If you re-read your research, most Americans since the Baby Boomers have changed careers, on average, 7 times in their lives. I have seen this in my own family and circle of friends. How many times have your relatives changed careers in the United Kingdom?

I am supporting my Mother who is living in a house with a significant mortgage. She is having to cash out her retirement in order to stay afloat. If I was not living with her, she would lose the house.

Yes the economics are bad world-wide. However, when recently unemployed professionals proclaim, "It is the end of the world!" Yes, it is the end of eating out for dinner each night after work, you have to cook every night from now on, no more premium wine, and trips to Ross from here on out, no more Banana Republic.

In essence, it is the end of their professional lifestyle until they can find a job to regain the lifestyle.

That being said, most Americans can keep their houses by going multi-generational, downgrading expectations of having that $60,000/year job right out of college, and taking any job from janitor to CEO to pay the bills.

The only people I know of who are long-term unemployed are those aged 50 and up where age discrimination is rampant and those who are somehow above working for minimum wage to pay the bills. These people (those above working for minimum wage) are quintessentially fucked because their expectations are insane, out-of-line with reality and their overinflated sense of self worth hampers them from taking a job to pay the bills.]

As for the long-term (2 plus years) unemployed who are aged 50 on up, I would suggest they take Social Security at age 55.

If i remember correctly in 07 the federal budget was about 2.5 trillion and so anything over that would be a deficit. For example in 06 the gross public debt which is the national debt was at about 10.7 trillion from what your website says. The federal deficit for the year of 07 was 160 billion, however the national debt did not increase by 160 billion. Instead it increased to 11.4 trillion which is up 700 billion and then in 08 bush's last year it increased again to 12.5 trillion. The reported deficit was 458 billion but was really about 1.1 trillion. 

As this information is based on the information from the website it does not say which was the emergency war fund that bush always used and which were programs like tarp and the stimulus bills, but something like funding 2 wars should have been included in the budget not something to be later tacked on to the national debt to make his federal deficit numbers look better then they really were.

So yes it is looking at the deficit and there is also the national debt which by the end of the bush presidency he was at about 1.1 trillion (not sure if this included any other emergency spending other then the war spending,) from this website alone.

If you were to look at other sites for information they say things like Medicare reimbursements  war spending adding in money for natural disasters are some of the reasons why bush's reported deficit in 08 was about 460 billion while in 09 it was 1.4 trillion as those were never accounted for in the federal deficit but were always there none the less. There is also other things to take into account like the federal budget shrinking by about 300 billion due to less tax revenue from 08 to 09 which would take the effect of the same amount being spent but since less is being taken in the deficit would look bigger. ( 08 budget about 2.5 trillion which 09 budget about 2.2 trillion)

So by the end of the bush presidency he was actually spending about the same amount as obama did in his first year.

The debt China owns is because his goverment has had lots of surplus and they dont spend it in their own country, but they save it and use that money to distorsionate the real value of their own and other's countries currencies. I know that debt is not worth that much now cause the FED polices made the dollar "cheap", but it still is there and the USA wants China to buy more, however, it is China that has chosen not to buy that much(They owned 27% of the total's USA debt a year ago, but now they only own 20%).

The US is the biggest market in the world, but it depends on the merchandise you are talking about. It is easier to sell 200 million cellphones a year to a 1.300 million population than a 300 million population. There is a new thing in economics called "Acquisitive Power Parity", i must accept i dont understand it that much, but it measures the salaries in one country, and compares them with "the cost of living" in that country. According to that metric, China and India are pretty close to the USA(Wikipedia) and i m pretty sure its internal market is going to get stronger when their currencies get as strong as the dollar.

Now, back to the USA, i think they need to lesser its military power, they spend way too much in that department for the benefits they collect. I know that many countries are dangerous, but the problem must be taken with a diferent focus if we want to solve it in a Win-Win situation.

I'm fairly sure that that's highly exaggerated. Obviously any big country disappearing would have big economic impacts given the globalized nature of the economy, but it's not like the world is hanging by a thread on the influence of the USA military. European countries have nuclear weapons, it's not like it would be open game for other countries to start invading.

As long as we're in the "country X disappearing" hypothetical context, imagine China disappearing for example. There would be a serious shortage of manufacturing capacity which would have big consequences. The immediate impact could be quite a lot bigger than if the USA disappeared. Or if some middle Eastern countries disappeared, there would be a sudden shortage of oil which could well send other societies into chaos in a matter of weeks.

The US were hoping for the Chinese economy to pull them out of a huge financial black hole and save the world economy from ruin. The US tried to fill a $200 trillion dollar black hole with a government bail out of $20 trillion. That is literally like trying to stop the Titanic sinking by putting your hand in the hole.

The financial derivatives market had somewhere between $1 quadrillion and $1.5 quadrillion invested into it: superannuation, savings and mortgages, etc all tied up into it. A lot more than $270 trillion which was reported in the media

Thanks for the explanation. However you will find no one on this site more pissed off about what Bush did in his last year then I was. I bitched on here for days about the bailout.

I think it was 700 billion right?  And that is tacked onto Bush's last year. I think that's what Obama is going to spend without bailouts, if I recall.

So while war spending and bailouts can just stop, spending on things like healthcare and other entitlement programs can't. Obama is shifting a lot more of the spending that direction.