On Fri, May 25, 2001 at 10:16:21AM -0400, Gautam Mukunda wrote:
> Behalf Of Erik Reuter On Thu, May 24, 2001 at 07:59:54PM -0400,
>
> > Gautam Mukunda wrote:
> >
> > > And, it can be pointed out, we're paying off that debt with ease -
> > > the US government now runs a yearly surplus larger than the total
> > > budgets of most of the countries in the world.
> >
> > How are we paying off the debt with ease? Filtering the noise (+/-
> > $100B or so) the US debt has not gone down in the past 14 years.
> > "Erik Reuter" <[EMAIL PROTECTED]>
>
> You need to compare those numbers to the proportion of GDP for them
> to be meaningful. According to your own numbers the debt has stayed
> roughly constant for the last two years. In that time the US economy
> has grown about 8%, I believe. Which means that it has dropped
> significantly in relation to GDP - without any increase in taxes on
> the part of the government.
The GDP is likely to grow much less than 8% in the next year or two,
and with the upcoming tax cuts we may very well start running yearly
deficits again.
Besides, you mentioned a surplus, which implies that the debt should go
down numerically, not just as a percentage of the GDP. I showed numbers
demonstrating that the debt has not been going down numerically despite
several years of so-called "surpluses". If the debt doesn't go down
numerically when we have a surplus, I wonder what will happen when tax
revenues are cut due to a slowing economy and a lower tax rate?
I would hardly say we are "paying off that debt with ease".
--
"Erik Reuter" <[EMAIL PROTECTED]> http://www.erikreuter.com/
