Thursday, October 24, 2013

US Debt Will Likely Remain At About 2X Historical Average For At Least Another Decade

From The Wall Street Journal, "How 'Debt Ceilings' Increase Debt: They provide the illusion of spending control while government expands apace." by Gary S Becker and Edward P Lazear:
The debt's burden on the economy can be gauged by its relation to gross domestic product. The Congressional Budget Office projects that the debt-to-GDP ratio will remain above 70% for the next decade. This is well above the 39% average over the past four decades. In 2007, before the recession began, the debt-to-GDP ratio was 36%. This debt ratio grew rapidly during the past five years, partly because federal spending increased greatly and partly because tax revenues were low during the recession and weak recovery.

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