If the growth of debt, in constant dollars, is about the same or less than the growth of GDP, there is no reason in the world to raise taxes, except in the ordinary sense that when people have more income, they pay more. If GDP growth markedly exceeds the accrual of deficits, you will pay down the debt, net.
I'm not sure why you use GDP in your arguments. Why not compare debt to federal revenues?
I found this interesting:
bea.doc.gov
The major contributors to the increase in real GDP in the third quarter were personal consumption expenditures (PCE), equipment and software, government spending, and exports. The contributions of these components were partly offset by a decrease in nonresidential structures. Imports, which are a subtraction in the calculation of GDP, increased.
So consumer debt and government spending increase the GDP and by your reasoning suggests that the government can carry a larger debt? Maybe you can explain to this non-economist why GNP has anything to do with allowing the people of this country to carry more debt since we are the government. |
