As I understand it, our national publicdebt was borrowed, in US dollars, from India and China in the sale of Treasury securities purchased with the US dollars that came from the sales of consumer goods in trade imbalance that has lasted for better than a decade.
Thus, even if the US is successful in reducing its fiscal deficit significantly, publicdebt relative to GDP continues to rise due to sluggish economic growth and a still high fiscal deficit.
The IMF says that public sector gross debt as a percentage of GDP for the US was 91.6% last year, rising to 99.5% in 2011 and is forecast to come in at 102.9% in 2012, despite assuming that the overall fiscal deficit declines by 3 percentage points to 7.1% of GDP.
In spite of a ray of transparency out of the cloudy reputation of rating agencies that sold us down the river on subprime and collateralized debt obligations, once theses firms realize the harm this public squabble elicits for them they will shut up.