Actually, not a lot as it represents only about 5% of GDP. By way of compariosn, Germany's rescus package of US$400-536 billion is 12-16% of GDP, and the UK's package of US$835 billion is 30%. Russia's package is 10% of its' GDP.
Can the US afford to add to the national debt? We were all treated to the news media's hysteria about there being not enough digits to show the new national debt. To put this in perspective, the total debt (including the package) is 62% of GDP, while the corresponding figures for the Eurozone is 75%, and Japan a whopping 180% of GDP.
More worrying is whether the US consumer can make it through the coming economic slowdown. In 1986, US household debt anounted to 80% of disposable income, growing to 100% by 2000, and 140% in 2007. US households do not have any savings to speak of, with many treating the built up equity in their homes as their savings which they have tapped regularly as housing prices moved up. Now that housing prices have fallen, many will be faced with diminhed savings and even calls from their banks to repay home equity lines. With money already spent or invested in additional real estate, the prospects are not good.
Bankers are now worried that the next crisis will be in consumer credit such as uncollectible credit card debts.
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