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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: RMF who wrote (17991)	2/23/2007 3:10:32 PM
From: TimF	Read Replies (2) \| Respond to of 71588

The trouble with always presenting things as a percentage of GDP is that GDP numbers are not a "static" That's not a bug its a feature. The most important concern about large budget deficits is how well the economy can sustain it. A deficit of X nominal or real dollars (or the equivalent in other currency) is a bigger problem in an economy with a GDP of Y dollars, than it is in an economy with a GDP of 10Y dollars. Our national debt even in inflation adjusted dollars, would have been much harder (probably impossible) for the economy of the US in 1940 or Canada today (both with GDPs of about $1 tril. to $1.2 tril in current or near current dollars), then it is for the economy of the US today. The deficit measured as a percentage of GDP tells us how big it is relative to the economy that has to make payments on it. or "ever growing" thing. Well not ever growing in the sense that every year the economy is bigger than the previous year. And not ever growing in the literal sense of growing for ever without end (likely there will be no US, and therefore no US economy in several million years from now, and no life on Earth once the sun goes red giant in another 5 or so billion years). But the normally the GDP goes up, and there isn't a good reason to think it won't continue to do so. eh.net Is our TOTAL National Debt a smaller portion of our GDP than it was in 1980? No but its slightly lower than it was in 1995 and maybe half of what it was at the end of WWII. If you look at the deficit as a percentage of GDP. Its lower now than 1990-1993, 1983-1986, and 1976, and some years previous to that (in particular during WWII). Does your "percentage of GDP" argument hold up when you figure in the future costs associated with Baby Boom retirement? It not an argument its a statistic. It will still be a relevant statistic when the baby boomers retire.