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By Charles Biderman

Total Federal Debt Already 2.5 Times Annual After-Tax Income of U.S. Taxpayers.

Sausalito, Ca, Nov. 9, 2012 - TrimTabs Investment Research says the Obama White House and the Bernanke Federal Reserve are putting the U.S. on the road to financial ruin because their main approach to dealing with America's economic problems since the financial crisis began has been pretty simple-borrow and print.

In a special report to clients, Trimtabs notes:

Over the past five years a combination of lower after-tax income and exploding government borrowing are putting the U.S. on course for fiscal disaster. The debt-to-income ratio of the U.S.-the ratio of total federal debt to after-tax income of everyone in the U.S. who pays taxes-nearly doubled in the past five years, rising from 1.4 in 2007 to an estimated 2.5 in 2012.

Says TrimTabs CEO Charles Biderman, "We want to emphasize that total federal debt is already 2.5 times the annual after-tax income of everyone in the U.S. who pays taxes. Moreover, this ratio is likely to keep rising unless President Obama suddenly changes course."

The report points out that in 2008 - right before President Obama took office - the after-tax income of everyone in the U.S. who pays taxes was $6.80 trillion. This figure includes both after-tax wage income and after-tax non-wage income from sources such as capital gains and rental income. After-tax income tumbled to $5.97 trillion in 2009. Trimtabs estimates, based on data through October that after-tax income will reach $6.60 trillion in 2012.

Meanwhile, says TrimTabs, "Total federal debt was $10.70 trillion at the end of 2008 - the year before President Obama took office - and we estimate based on year-to-date data that it will reach $16.47 trillion in 2012. In other words, total federal debt will have shot up $5.77 trillion, or 54%, in four years."

Says Biderman, "After-tax income, is down in nominal terms and down even more in real terms since President Obama took office.

Despite the constant chatter about 'recovery,' after-tax income in 2012 is on track to be 3% below its peak n 2008, even before adjusting for inflation. After adjusting for inflation-even using the government's understated measure-after-tax income is on track to be more than 10% below its peak.

Even if after-tax income grows by $250 billion per year in the next few years, which we believe is extremely unlikely given the headwinds facing the global economy, total federal debt is likely to keep expanding at least $1 trillion per year, if only to fund the costs of Obamacare. How long will the rest of the world keep funding the U.S.? If the Fed tries to take care of most of the funding itself by printing money, how long will investors want to hold U.S. dollar assets?

Biderman notes, "By the way, we are almost the only ones we know who analyze after-tax income, which is available in real time from the U.S. Treasury. Most on Wall Street prefer GDP because they swallow whatever government bureaucrats feed them. GDP is a poor measure of the overall economy's health that was created in the 1930s, when no real-time data was available."

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Source: U.S. Treasury and Federal Reserve. The data for 2012 is a TrimTabs estimate based on data from January 2012 through October 2012. We assume a blended tax rate of 25% to calculate after-tax income.

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Source: U.S. Treasury and Federal Reserve. The data for 2012 is a TrimTabs estimate based on data from January 2012 through October 2012. We assume a blended tax rate of 25% to calculate after-tax income.

Source: Obama White House, Bernanke Fed Putting U.S. On Road To Financial Ruin