Lost amid last month's passage of the new health care law, the Congressional Budget Office issued a report showing that within this decade, President Obama's own budget sends the U.S. government to a potential tipping point where the debt reaches 90 percent of gross domestic product.National debt -
how much worse can it get?
We may find out yet.
Hi John,
ReplyDeleteI saw a graph which showed that during WWII the US had a national debt of 100% of GDP and above. It peaked at 120%. I remember in school in the early '60s we would learn about the colossal national debt. I never followed up later to see what happened to it. I mean I know it increased, but I always wondered if it did not spiral into a collapse of US credit worthiness thanks to inflation.
At any rate, I remember in the 2004 Presidential primaries two of the Democratic candidates were sounding the alarm about increasing national debt: Dean and Clark. On the Republican side, for the only time I can recall, Greenspan chimed in and stated that cutting taxes would be alright, to support the reelection of the President. That seemed to be his one occasion of turning a blind eye to the threat of increasing debt and inflation. Later we learned of the Cheney remark in the White House on the debt that would be incurred by invading Iraq: "Reagan showed that deficits don't matter."
It has seemed to me that aside from economists and people with some education in economics, politicians and folks in general get upset about increasing national debt only when it is incurred for some project they do not regard as a legitimate function of government. But of course the debt and inflation are important and cruel matters whatever the government projects they make possible.
--Stephen Boydstun