An Interesting Perspective

[Guest]

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/

[Guest]

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.

[Guest]

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/

It is an interesting perspective, if your a liberal. You have seen me quote Milton Friedman, also a Nobel Prize winning economist, in my posts. I believe in Mr Friedmans' viewpoints on economics. The key here is "perspective." Some people see a red apple, some a green, depending on which side of the apple one stands. The reality lays in the core, that's what makes it an apple, not the color. Liberal and conservative core beliefs are different. One of my core beliefs is that government is more of the problem than the answer, as so well shown in Milton Friedmans' TV series and writings.

Mr Friedmans' viewpoint, back in the terrible President Carter days with stagflation, is that the government debt was possibly unable to be paid off. The costs to our economy, in sacrifice to pay off the debt, were considered by him to be insurmountable. His rational ability to strip the flesh off the cause and affect of government interference , and see the bone structure of the problem, was amazing. His viewpoints on government spending on social agendas is displayed in today's economic problems. Government has taxed and spent us into all the problems he pointed out, showing how right his economic thinking was. Mr Krugmans' thinking appeals to liberal apples but is a rotten core for conservatives.