Debt burden continues to decline under profligate Democrats
Posted by Charles II on November 29, 2012
First, household debt:
Now, that’s pretty easy. If the bank forecloses on your house, your debt is extinguished. This is not really the kind of debt decline we’d like to see. But actually the federal deficit has been falling since the end of the recession.
(image from FRED)
So, yes, at 8.6% of GDP as of 2011, the deficit is too high. As more people go back to work, the payroll tax holiday goes away, and the wealthy are cajoled into paying a little more in taxes, the deficit should drop swiftly… it’s already down from the 10.1% of GDP achieved by Dubya Bush in fiscal year 2009 (ending in October 2009, and therefore preceding almost all of the stimulus spending, contrary to what James “Dow 36000” Glassman thinks, only 22%–$33B– had been spent, most in the form of a special payment to Social Security recipients).
The magic number is about 3% of GDP. As long as the deficit remains under that limit, the debt burden will not rise, since it will be within population + productivity growth. Notice which presidents achieved that level of deficit or better.
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