Robert Samuelson surveys the ocean of debt:
In 1946, after World War II, the ratio of publicly held federal debt to GDP was 108.6 percent. Since then, the economy (our income) has generally grown faster than the debt. In 1974, the debt-to-GDP ratio reached a post-World War II low of 23.9 percent, and even in 2007, it was only 36.9 percent. That was manageable.Uncharacteristically, Samuelson doesn't even mention the unfunded liabilities of entitlement programs and government pensions which have swollen full of promise without the means to pay. La-dee-da, let's spend another trillion dollars:
By contrast, today's prospective colossal borrowings dwarf likely economic growth. The Obama administration's latest projections, released last week, show nearly $11 trillion of borrowing from 2009 to 2019. In 2019, the debt-to-GDP ratio would be 76.5 percent. This could be too optimistic, because it assumes some spending restraint and tax increases. A projection by the Concord Coalition, a watchdog group, adds about $5 trillion in borrowing in that period. In 2019, the debt-to-GDP ratio could be roughly 100 percent.
3 comments:
...Samuelson doesn't even mention the unfunded liabilities of entitlement programs and government pensions...
Not to worry. They'll all go the way of Ted Kennedy. All of these entitlement programs, predicated upon an unlimited line of credit with China, Japan, et al, will either be deliberately eliminated by Congress (yeah, right...) or forcibly elimitated by inflation.
Either way, if you're <40 you're not getting social security, medicare or stupid-care in whatever form it eventually reveals itself.
So lose some weight, fatty. Stop drinking so much. And for God's sake, brush your teeth once in a while.
Uncharacteristically, Samuelson doesn't even mention the unfunded liabilities of entitlement programs...
OTOH, very characteristically, Krugman didn't mention the unfunded liabilities at all last Friday, when telling Jim Hamilton "Don't worry, be happy!" about all the new Obama debt -- after ranting on about the unfunded liabilities ...
"I'm terrified ... we're looking at a fiscal crisis that will drive interest rates sky-high ... a looming threat to the federal government's solvency ...
the conclusion is inescapable ... the task is simply impossible ... the fiscal train wreck, is already under way."
... back when Bush was president.
Krugman verus Krugman
A health care system will provide an amount of return to the U.S. economy that a war in Iraq will (and has) not.
Maybe it won't be enough to justify the cost. But any 1-to-1 comparison against Bush's loose spending is wrongheaded.
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