Friday, January 13, 2012
DEBT TO GDP -- INTEREST -- OBAMA'S INCREASE REQUEST
Finally, more reporting media have "found" the truth about the national debt-to-GDP ratio. Out is the foolish claim that only "outside" debt counts and $4.8 Trillion debt to Social Security isn't material. Truth is that the ratio is now 102% -- Greece-like. I heard the truth on Fox News and was informed that Drudge posts it too. Don't follow Drudge.
Now Obama requests approval for an additional $1 Trillion of debt. Absent a counter-balancing increase in GDP, the ratio will be nearly 107%. Who among you can predict that increase will be offset by added revenue? Who thinks it's acceptable?
For the misguided (OK, foolish) economists, such as Krugman and Blinder, Princeton's "finest", who say that debt "doesn't matter," interest on the debt is now $454 Billion/yr and soon will be 1/2 Trillion dollars.
Who among you can forecast an increase in GDP that would get the ratios to acceptable levels. Absolutely can't happen. Sorry, it is what it is.
We are about to join the PIGGS of the EU.