The US deficit is in double-digit trillions if 1.0 also counts as a double digit given 1.7 apparently does.
https://www.macrotrends.net/global-metr ... -gdp-ratio
Note that under Trump, the debt per GDP hit its all-time high
in 2019 before COVID. (while I don't think this is meaningful, it's an obligatory mention if Ajax decides to post)
Notice that while high, it is going down. Thanks to Joe Biden. (another obligatory mention for Ajax land that I don't believe)
Is it too high? The credit rating of the US is determined by its global power, and if Russia, China, and and North Korea have no fear to expand, the multi-polar world will come at a cost in terms of the value of the US dollars and US bonds. But there are plenty of other risks, as Mike Johnson said:
Mike Johnson wrote:I think that Vladimir Putin would continue marching through Europe if he were allowed. I think he might go to the Balkans next. I think he might have a showdown with Poland or one of our NATO allies.
To put it bluntly I would rather send bullets to Ukraine than American boys. My son is going to begin in the Naval academy this fall. This is a live fire exercise for me as it is for so many American families.
Why is "trillions" too much? I see no justification for it. In terms of personal finance "balance the checkbook", if my net worth is 140k (gross is 170k), and if I have a house with 30k left to pay, and a job that pays 30k per year, and I'm thinking about a car, should I refuse to finance one, insisting first on paying off the house? Adding more zeroes to all of the numbers doesn't change their proportions. A trillion in the abstract means nothing. Maybe the personal finance analogy doesn't work, but then what is the right analogy?
If 6% of GDP
is too high, we could raise taxes to knock it back a little. I guarantee you, however, that while Mike Johnson would rather send bullets to Ukraine than his son, he will send his son long before he will pay for the bullets upfront.
Just like in personal finance, whether we should take on more debt or not depends on what the reasons are for taking on the debt. Simply noting the amount of debt or deficit in the abstract with no other information is NOT a reason to avoid more debt.
Social distancing has likely already begun to flatten the curve...Continue to research good antivirals and vaccine candidates. Make everyone wear masks. -- J.D. Vance