Interesting numbers below, right?
Except during World War II things were relatively stable. Even when debt began to rise, the debt to GDP ratio was relatively stable because GDP kept up with rising debt. In the mid 1980s that began to change. Our debt started to grow faster than the economy. The major change began in 2004 and it has been getting worse since and is on track to become much worse. We continue to outspend the growth in out economy.
The really scary part is depending on which experts you ask the growing federal debt is a problem or not. The key seems to be how long low interest rates continue. Here is what Brookings says:
If current policies persist without change a big “if”—the Congressional Budget Office projects that deficits and the debt (as a percentage of GDP) will rise as more Americans become eligible for Social Security and Medicare, as health care costs continue to increase faster than the economy, and as interest rates rise to more normal levels. By 2030, the debt is headed toward 118%, according to recent private sector projections. And while the recent increases in debt seem quite manageable, the federal debt cannot grow faster than the economy indefinitely. Eventually, private borrowing will be crowded out if the government’s debt continues to grow, and interest rates will rise. At some point, action will have to be taken to rein in the deficit, but we may be a long way from that point.
Here’s what the numbers represent.
Year by presidency 🤑🤑Debt per citizen🤑🤑Debt/GDP ratio
Source: US Debt Clock