The Reagan tax cuts certainly increased the deficit, but when they were combined with the Clinton/Gingrich budget controls, we were soon paying down the debt and growing much faster.
We haven't paid down the debt at all, except for a few short periods of 1-3 months, since 1956-58 during the Eisenhower administration, per the Fed's Z1 (D3).
The debt became far less of a problem, at least in terms of GDP
Truth.
Let’s look briefly at where we are now—at the constraining facts that any economic proposal must take into consideration.
Total US debt, including private and business debt, is $67 trillion, or just under 400% of GDP. We have 95 million people not in the labor force. 15 million of them are not employed. That’s twice the number officially unemployed.
We have almost 2 million prison inmates, 43 million living in poverty, 43 million receiving food stamps, 57 million Medicare enrollees, and 73 million Medicaid recipients And 31 million still remain without health insurance..
The US federal government debt will be slightly north of $20 trillion before Obama leaves office in January. Local and state debt is another $3 trillion. That is a total of more than $23 trillion of government debt. The US economy will be a few hundred billion dollars under $19 trillion at the end of this year. That is a debt-to-GDP ratio of somewhat over 121%.
That debt has risen roughly $10 trillion under Obama, in just eight years. Last year, the debt rose $1.4 trillion, even though we were told that the budget deficit was less than $600 billion. Lots of off-budget debt gets added each year.
Truth again, except for total debt since your Forbes figures don't include accruals and aren't based on GAAP accounting. I've seen estimates of accrued debt for things like SSI and VA and Medi(whatever) of between $80 and $250 trillion (my own optimistic accrued debt figure is ~$100 trillion). Take your choice/poison... -ng-
Unless Trump manages to get much higher growth than expected (not impossible but unlikely), the only ways out (and they really aren't net headed out) is stumbling ahead via "sentiment management" or significant inflation. Even after Reinhart and Rogoff corrections to their Excel formulas, Government debt at these levels leaves little to be optimistic about for the future... barring a Krugman alien invasion that Earth wins. ;) |
