The Congressional Budget Office predicted 10 years ago that the U.S. national debt in 2012 would be approximately 7.4 percent of gross domestic product (GDP), a measurement of the value of a nation’s total output of goods and services.
However, two wars, a recession, economic downturns, and unchecked government spending have changed things significantly. Quite simply, U.S. debt as a percentage of GDP is much, much more than 7.4 percent.
Here’s the CBO’s 10-year budget forecast from 2002 (courtesy AEI’s James Pethokoukis):
And here’s what actually happened:
“Instead of publicly-held debt as a share of GDP being a microscopic 7.4% this year, it was closer to 74% – or 72.8% to be specific (as of the August update from the CBO),” Pethokoukis explains.
Yes, our national debt as a share of GDP is approximately 74 percent. This is absolutely unsustainable.
“In 2007 — the Great Recession is officially dated as starting in December of that year — the debt-GDP ratio was 37%,” Pethokoukis adds. “So a doubling of debt due to the Great Slump — the recession and its slow-growth aftermath.”
Speaking of a “doubling of debt,” we know we included this clip in another article this morning, but perhaps it’s worth repeating. Here’s Texas congressman Ron Paul explaining how Washington’s failure to address its spending problem has put us down the path of “no return”:
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