deficit vs. GDP

[E_Smith]

a repub friend of mine defended the Bush budget deficit by stating that as a percentage of GDP its only 20-30% and therefore its not that bad (he compared it to the Reagan deficit). Is this true and is it a proper comparison?

[Inland]

1. Funny, even Reagan thought the Reagan deficits were unacceptable.

Reagan and his supporters at least acknowledged that the deficits were a bad thing and, in homage to that concept, tried to blame democratic big spenders.

Bush, having run out of his own idiot excuses (blaming Clinton, 9/11), now has people claiming that W's deficits aren't any worse that the last raft of crippling deficit spending caused by idiot tax cuts that it took Bill Clinton eight years to fix!

W's supporters are satisfied arguing that he isn't the worst president ever. But he is. Bush--suffering the soft bigotry of low expectations.

[E_Smith]

2. yeah but

does anyone know if there is any validity to justifying a deficit by comparing it to GDP? seems like its apples and oranges.

[niceypoo]

3. Its a way of ignoring

the fact that accumulated debt is what really causes the damage. Right now about 30% of the federal gross tax reciepts go to pay interest on the national debt. Thats almost as much as we pay for military......into a black hole. Its the elephant in the room that nobody mentions.

[kentuck]

7. It's bullshit....

That is Repub bullshit to dismiss it as unimportant - minimize it as a small percentage of the GDP. It's not relevant to the GDP. It's like saying that the GDP so dwarves the deficit that at any time we can get the funds out of the GDP to pay for the debt...unfortunately, it is not so easy to get blood out of a turnip. Who wants to have their taxes raised to pay for the deficits"? Nobody! So what does it matter what the GDP is?

[GOPBasher]

4. The real issue is the DEBT

The total debt is the concern, not the particular deficit this year. Right now, ANY deficit is worse than the deficits in the Reagan ear, simply because the DEBT is much high and we keep adding to it. The issue is how much total debt we have to pay back, so at at this point, it's not okay to have ANY deficit.

[PurityOfEssence]

6. Yes, and yet nobody hears you

"Deficit" and "debt" are somehow synonomous in the alleged minds of Americans. The idiocy is astonishing. We are in a huge hole now, with no plan to get ourselves out.

The joyous lie that in five years we're going to live only half as far beyond our means as the ruinous insanity of the present completely ignores the reality that we're compounding staggering debt all the time. It's nuts. The asshole chirpy arguments that we've had deficits bigger in comparison to GNP make no sense for two reasons: the only times we did that were during the Depression and World War 2 (MAJOR upheavals the history of civilization), and times when the overall debt wasn't such a nightmare.

To many, if we're even or in surplus, everything's rosy.

It's ALL ABOUT THE GREEDY TAX-CUTS. The lie of 9-11 screwing the pooch is disgusting: OMB predicted a 1 Billion Dollar deficit in August of '01.

It's all sickening, isn't it? Iceberg? What Iceberg? I want 22 knots, you peon.

[GOPBasher]

9. That's so true, and you stated it so well. "Iceberg? What iceberg?" nt

[dsc]

5. It is true

and it is even a somewhat valid measure of the effects of a deficit. But given that the debt is much larger now and we are starting to run out of time with programs like Medicare. Thus even though the deficits are not as large as a measure of GDP they are worse now given that the structual spending is set to increase for the next several decades.

[Yupster]

8. It's true

It's like saying that a guy who makes $ 250,000 a year has a $ 100,000 mortgage, and another guy makes $ 20,000 a year and has an $ 80,000 mortgage. So who's in worse shape?

It's not the guy who owes $ 100,000 just because $ 100,000 is bigger than $ 80,000. I'ts how much you owe compared to your ability to pay it back.

That being said, our defecit and debt are still way too large, regardless of how big the economy is.

However, the only way we will get out of defecit is to grow the economy faster. That's the only way that brings huge amounts of unanticipated dollars into the system. If you remember the late 90's, every quarter the defecit predictions would go down by tens of billions of dollars even though congress didn't make any changes during the period. That was because of the economic boom and especially the stock market boom. It went up over 20 % a year for five straight years. That brought with it tens of billions of dollars of capital gains taxes that the government had not anticipated. The defecit melted away.

So how do we get the economy winging again?

[Jim__]

10. US GDP is about $11 trillion, the annual deficit, let's say $400 billion

That's about 3.5%.

But, I agree with previous posters, it's the total debt and the total amount of tax revenue that goes to paying off the debt that's important. BTW, since Social Security is running ahuge surplus riight now, that's making the total deficit look smaller than it actually is. The government is increasing it's debt by borrowing against the SS surplus; yet counting the SS surplus as a reduction in the deficit.

One other thing, our debt is largely financed by foreigners; and I think the biggest lender right now is the Chinese government. On top of losing essential industries to China, we are dependent on them to finance our government. The Chinese government has the power to cause a financial catastrophe in the US. How's that for a national security blunder?

[kentuck]

11. Yes, if the GDP belonged to the government...

and they could use it at any time they choose to raise taxes, then it might be relevant. However, the people own the GDP and right now, they are not willing to pay more. In fact, they want to pay less.