(Community Matters) Reading Krugman, Mision Not Accomplished, I started wondering about our current debt as a percentage of GDP. This graph from gov’t figures located in Wikipedia.
Like a lot of Americans, I’m not at all thrilled about where our debt is; I’m not sure anyone is. So, maybe we can all agree on that as a start – no one *wants* more debt. I suppose the disagreement ramps up as to whether or not it’s prudent for the government to continue borrowing to stimulate economic activity or otherwise create jobs and expand government services.
So, looking at historical levels of debt: I notice 1) the rise in debt as a percentage of GDP (second graph) since the 1980s, 2) that nearly 30 points of debt as a percentage of GDP is held by the government (and I have to think more about this math – gov’t owing gov’t. To the extent represents future obligations, what does that say?), and 3) during WWII, the percentage was a lot, lot higher (so what are the implications since we’re in the middle of two wars, just averted a complete & devastating meltdown of the global financial system and since 2001 we’ve cut taxes & expanded corporate tax breaks instead of paying for our two wars).
I don’t know what’s too much in the context of today’s economic challenges.
Think I want to next look at the annual burden of debt service against GDP.
Community Matters 