Ten years ago the federal debt was equivalent to less than a third of US gross domestic product. Now it is nearly two thirds. If nothing changes, according to the Congressional Budget Office (CBO), the federal debt could exceed GDP by 2021. Interest payments alone could absorb roughly two fifths of all federal revenues by 2031. So everyone agrees that government has to address the debt, and soon. -- Niall Ferguson, Newsweek, August 1 and 8, 2011
Yes, the ratio of the national debt to the total economy is high relative to what it’s been. But it’s not nearly as high as it was after World War II – when it reached 120 percent of the economy’s total output. If and when the economy begins to grow faster – if more Americans get jobs, and we move toward a full recovery – the debt/GDP ratio will fall, as it did in the 1950s, and as it does in every solid recovery. Revenues will pour into the Treasury, and much of the current “budget crisis” will be evaporate. Get it? We’re really in a “jobs and growth” crisis – not a budget crisis. -- Robert Reich, RobertReich.org, July 28
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