Deficit as a % of GDP - can anyone point me to a graph?

[gristy]

I'd like to see what it has been over the years. I just had a repub friend tell me that he thinks the deficit is a relatively low % of GDP, historically speaking. I said I thought I had heard that it is not the highest it's ever been but it is close. What I forgot to mention to him was how our deficits have become structural - they are so large and uncontrolled that it will soon or already has become impossible to pay them down (or even bring them under control) without drastic repercussions on our economy.

[lastknowngood]

1. Not off my head however just be aware the Debt is now 3 times

the GDP. That is like having three times your salary in credit card debt and knowing you have many more bills comming.

[ThoughtCriminal]

2. Remember - Debt NOT Deficit

Sorry don't have numbers handy but I run into this alot.

The DEFICIT is only something like 4% of the GDP. But the DEBT (the accumlated deficits which the gov't pays interest on) is WAY bigger (60% of GDP in 2002).

http://www.economist.com/countries/USA/profile.cfm?folder=Profile-Economic%20Data

The alarming thing is to look at the percentage of the Federal budget that is going to pay that debt. And if the defecits continue, those interest rates - although very low now, will skyrocket.

The real crisis comes whem the boomers start retiring and we have to pay back the $ that's been borrowed from Social Security.

[daveskilt]

3. not to mention

that there is nothing in the "lock box" hasnt been for years. and when the boomers retire there will be 1.8 people paying ss for every one of them collecting. if we pay for their needs completely that leaves 20% of your income (before other taxes to pay off the debt) for you to live on.

[creeksneakers2]

4. Try this

http://www.house.gov/budget/msrslide4bgt071703.pdf

5. Nice graph, but ... "Double Trouble Deficit Bubble"

Re:
http://www.house.gov/budget/msrslide4bgt071703.pdf

That graph is missing one critical element. You need to compare apples to apples.

The current GDP number is NOT like past numbers. It is far more leveraged on top of debt than past GDP numbers!

What do I mean?!?

Consider that a great portion of the GDP numberis based on borrowing for homes and borrowing against homes. An additional portion was generated as part of a fancy racketeering cycle which I have filed an FTC complaint about, involving GM and Ford catalyzing their own loan volumes.

So the GDP number is INFLATED by credit already!

It follows that the "deficit percent of GDP" is actually far more leveraged than in the past, because the GDP number itself is SOOOOOOOOO leveraged!

DOUBLE TROUBLE DEFICIT! The real percent of GDP is actually much higher, were it not for the credit inflation of the GDP base!

Also, consider that deficits greater than 5 percent GDP are usually reserved for BANANA REPUBLICS! So you can see their motive for inflating the GDP number in such an awful and irresponsible way.

6. How the housing bubble fits in

My understanding is that the gross GDP number of fixed real estate investment is directly proportional to the housing bubble created recently.

That is to say, the "output value" of RI GDP is calculated based on the aggregate sale (loan)price of all new homes built in each quarter.

This suggests to me the housing bubble is a construction to make the defict percent GDP look smaller. That is:

Big defict number / BIG GDP number (inflated by house and vehicle bubble)
is much smaller than
(Same) Big deficit number / Smaller GDP number

And that is not all--my discovery that the "new homebuilders" are major donors to the GOP, AND Bush's former cabinet member who oversaw Fannie Mae was described in a Wash Post article as the one who "brought in the most donations for the GOP"

Fannie Mae is the one who buys up the mortages for the homebuilders....and from which a bunch of execs just got booted.

Also consider that the way they accounted for houses changed (BINGO) around 1983 -- note the long bar on the graph in guess which year--1983! From my research website -- "Yet, the source of the problem traces way back to 1983-changes made to the CPI under Reagan, which are now interacting dangerously with low interest rates(11)."


Connect the dots! This is QUITE a racket.

Like I said: "Double Trouble Deficit Bubble"

8. I made a slight error

It is Freddie Mac,not Fannie Mae, who got in the most trouble. Though they are both related, and in trouble.

Dan

[kalian]

7. You're right....

unfortunately, the "common Joe" doesn't believe that nor does he
comprehend what's going on with the numbers.

Oh well...it was fun while it lasted, no? :eyes:

[idlisambar]

9. It is only low...

...if you are using the worst of the Reagan and "Bush I" years as a reference point, but at this rate it will become even worse. It is also more troublesome because the boomers are now on the edge of retirement, so social security and medicare costs will skyrocket in a few short years.

[YankmeCrankme]

10. I hope I don't sound stupid...

But why do we compare debt against GDP? Since debt is an accumulation of yearly budgetary deficits shouldn't we compare it against government income/assets? As an individual you would compare your money owed against your assets/income. The GDP isn't a governmental asset, is it?

[ramapo]

11. Beware of GDP inflation

Today's GDP is not calculated the same as it was prior to 1995. Output due to computer spending is calculated not just on the price of equipment but also upon the computational power.

There have been huge increases in computer power since 1995 so comparing productivity and GDP of today to that of the Reagan and Bush years is a bit apples vs. oranges.

This takes a bit of the shine off the Clinton "New" economy too.

[ochazuke]

12. Here's a chart for you!

Go to www.pimco.com, click "U.S." then on Bill Gross' latest Investment Outlook (The Last Vigilante).

You'll find on page four a chart of total credit market debt as a percentage of GDP. That includes debt from both private as well as public sectors.

You can see that it was low back in the early twentieth century, tne skyrocketed as we went into the Great Depression and the GDP shrunk by a quarter. It hit 270% according to this chart.

Then it came back down into the War Years and remained steady at around 120%.

Then, it started to climb in the early 1980s and has never looked back.

Now it's at 299%, as another post here states.

(What happens if our GDP shirnks NOW!?)

13. Direct link to the story (see debt/GDP graph)

A must read. That graph is way scary!

I would have to say, when Bush brags "interest rates are low", it is a symptom of a PROBLEM, not a plus.

Note the debt graph really takes off around 1983--when Reagan and Bush I got their hands on the economy.

http://www.pimco.com/LeftNav/Late+Breaking+Commentary/IO/2004/IO_02_04.htm

14. ANYONE -- try to link that debt/GDP chart into DU directly?!?

I think there should be a way to do that.

[Kenneth ken]

15. let's see

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hey cool - I learned a trick! And I'm an old dog. :P