"...* Yes, the federal debt is higher than when the President took office. Debt in 2001 = 35.1% of GDP. Projected debt in 2009 = 37.9% of GDP.
* The claim that the debt is "almost doubling" under this President is absurd. Measured as a share of the economy, it's about 8% higher than it was when the President took office. (37.9 - 35.1) / 35.1 = 8%
* This debt increase comes in the context of: an inherited recession, a stock market crash, corporate scandals, a terrorist attack, war, and a huge increase in the price of oil...
...I want to more fundamentally disagree with Chairman Conrad's claim that "the debt is the threat". (He has another chart that says this.) His statement focuses entirely on what has happened to the debt (using a misleading measure) over the past seven years. His focus is: (1) backward-looking, (2) short-term, and (3) focused on debt.
This is trivial compared to what we call "the real fiscal danger": the projected long-run future growth of federal government spending.
* Where the Chairman's focus is backward-looking, the real fiscal danger is in the future.
* Where the Chairman's focus is on the past seven years, we face the real fiscal danger over the next several decades.
* The Chairman focuses on the debt. This is incomplete - our problem is debt driven by projected future spending growth. (I'll cover this point in a future blurb.)
To make the first two of these points, let's recreate the above graph, but I'm going to expand the timeline to cover the next several decades. Same graph, longer timeframe:
...Back to Greg: This is correct as far as it goes. What my friend forgets to mention, however, is that the Medicare prescription drug bill signed by President Bush significantly increased the long-term spending trajectory. (FYI, both Senator McCain and Senator Clinton voted against the bill. Barack Obama was not yet in the Senate. Senator Conrad, who above expresses so much concern about fiscal responsibility, voted in favor.)
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