Which is larger? China GDP or the U.S. Federal budget?

China, but just barely.  At $4.3 Trillion in GDP, China ranks fourth in economic output (if you include the European Union as one entity, which would rank first)

The US Federal Government, not our entire country, just the institution of the federal government, at $3.6 Trillion in expenses ranks just behind the entire country of China, and just ahead of Germany ($3.2 trillion) and the rest of Europe.  The US Federal Government is nearly three times the size of Russian GDP.

What that means is that US Government is managing a budget as large dollar wise as Communist China’s Central Committee is trying to manage with their entire economy.  That’s big.

Iraq, at $90B in GDP, has consumed over $700B in US resources.  If only Iraq had been for sale, we could have bought it for 6 times revenue and saved a bundle!

US might lose AAA bond rating. First since 1949

This from Moody’s today.

“Growth alone will not resolve an increasingly complicated debt equation,” Moody’s said. “Preserving debt affordability” — the ratio of interest payments to government revenue — “at levels consistent with Aaa ratings will invariably require fiscal adjustments of a magnitude that, in some cases, will test social cohesion.”

That difficulty has been well-illustrated recently in Greece and Portugal, with strikes and protests as citizens hit the streets to oppose tough austerity measures that directly reduce entitlements and state benefits.

Lower debt rating raises our costs of borrowing and reduces the influx of money seeking safe haven in the U.S.