Quote:
Originally Posted by Villages Kahuna
Like most of you here, I have been appalled at the pig-at-the-trough spending of the last several Congresses and at least two political administrations. But I read a statement on Paul Krugman's blog (Krugman being the Nobel prize-winning economist that is also a columnist for the New York Times). In his latest public blog entry, he makes the following points regarding the skyrocketing U.S. national debt...
The U.S. economy is enormous; this year our GDP will be around $14 trillion. If economic growth averages 2.5% a year and inflation is 2% a year, GDP will be around $22 trillion a decade from now. On that basis our national debt will equal around 45% of GDP.
Right now, federal debt is about 50% of GDP. So even if we do run the kind of deficits being projected, federal debt as a percentage of GDP will be less than it is now and substantially less than it was at the end of World War II.
Take a look at this blog entry as well as many others on Krugman's blog page at http://krugman.blogs.nytimes.com/ |
The biggest difference in the debt was that at the end of WWII the debt was held by Americans in the form of war bonds. Now, much of the debt is being held by foreign nations who leverage trade deals and other concessions based on the debt holdings.