But debt / GDP is down?
Nope. Wrong. Krugman is an idiot.
Can I have my Nobel prize now?
I’m going to try this at home. I’m going to keep getting more credit cards and maxing them out. Then I’m going to get more jobs so that my debt to income ratio looks okay.
The assumptions underlying this are from a left-of-center think tank. But, even with these assumptions, without $1.4 trillion of additional deficit reduction, the ratio of debt-to-GDP goes to a trend of rising, which is (at this time) admitted even by Krugman to be a problem. So, we have a problem. The President’s solution to the admitted problem is additional tax increases. Round 2 if you will, of tax increases. “A balanced approach” of this Administration therefore means only tax increases.
Now, to turn the clock back to 2006, when Obama was merely a blowhard U.S. Senator, he described running a deficit that maintains the ratio of debt-to-GDP at 30 percent to be “unpatriotic.” His position now, as a blowhard U.S. President, is that running a deficit that maintains the ratio of debt-to-GDP at 60 percent is “responsible.”
Back in 2006, he said that deficit spending to counter a recession was a good thing; but, with recovery, we needed to return to a balanced budget if for no other reason than to restore the capacity to run a deficit to deal with a future contingency. I agreed with his thinking then, as I think most economists do. (By “most economists,” I mean economists not named Paul Krugman.) So, why would I change my mind today?
Oh, wait, I forgot, it’s because he’s Obama the Great, and I’m merely a peon. What was I thinking to ever question whatever Obama the Great is currently saying. Obama the Great is like the Koran, you know, eternally true from the beginning of time itself, only whatever part of it Muhammed said last trumps what parts of it he had previously said.
But the PROBLEM with projections is that they are based upon assumptions which may not occur. And IF the projection is created based upon wishful thinking, or some underlying agenda, the probability may be quite high that the assumptions will not occur.
All the historical data I see suggests that we are adding debt at a rate of about 7% of GDP per year. Unless GDP is growing much faster than 7%, or someone has decreased the Federal outlays, the deficit will continue to grow.
I think Krugman's graph is projecting an uptick in GDP as if it is a permanent growth trend, i.e deducing that a change from 1% GDP growth to 3% GDP growth is a trend and projecting it to 5%, 7%, 9%, 11%, etc. - until the growth overpowers the spending.
I doubt that anyone who has ever met a budget in the real world would project that rising income would overwhelm unbridled spending. But the analysis gives Democrats a little more time to avoid accountability, and that seems to be their main goal: "steal all we can while we can, then blame the problem on the other guy".
The start point of the graph is around 72.
Now, I haven’t won a Nobel prize in a while; but, isn’t our debt $15.9 trillion and GDP $15.8 trillion.
Wouldn’t that make our ratio 100ish?
What flawed assumptions were used to make this propaganda.
Krugman is as enthusiastic although inept a liar today as when I knew him back in the 1970s and 1980s:
The "recovery" assumption includes an extremely robust recovery for which there is no evidence beyond his assumption that it would be nice if the socialists and crony capitalists had more of our money to use in destroying our country.
The graph he chose to display starts in 2012 at 72% (peaking at 80% to 82% in 2014, regardless of spending cuts) and assumes that the current level of debt is acceptable, despite the evidence in our anemic recovery that we are already at a debt level that is economically crippling. A more accurate measure of national debt to GDP would be $16.4T/15.5T = 105.8%, not 72%.
National debt to GDP was under 20% until the Great Depression, rose to 40% before FDR took office, skyrocketed to 120% by the end of WW2, dropped to 70% before Truman left, 55% under Ike, 35% under LBJ, stayed in the low 30s under Nixon, Ford, and Carter, rose steadily to 65% under Reagan and George H. W. Bush, and dropped to 55% under Clinton. The ratio rose to 65% in the first six Bush years, then skyrocketed to 85% under Bush/Pelosi (for which I will never forgive Bush or Pelosi). Debt to GDP has continued rising under Obama at almost the same pace as under the two years of Bush/Pelosi, and I am thoroughly disgusted with Obama, Pelosi, Reid, and Boehner for what they are doing to our children. The $6T in frivolous deficit spending has harmed not only our country today but also the country our children will inherit.
There are innumerable other problems in Krugman's analysis, but the bottom line is that it is the usual Krugman propaganda - cherry-picked facts selected to further a big government agenda and not to honestly present objective reality.
Typical Krugman BS in support of a centrally-planned state-run economy.
If we have solved the deficit then we no longer need to raise the debt ceiling.
Sure Pythageroues
..
Okay, so the good Professor Krugman is saying that the very bad national debt situation is still getting worse but now it is getting worse at a slower rate.
Swell. So went does think we will reach a point where the US government is actually paying down the debt?