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by RC_ITR 998 days ago
Why?

Is it also easy to say the stock market being over 100% of global GDP is too much? That’s only been true for the past few years too.

One is an absolute value thing and another is an annual thing.

There’s absolutely no logical reason for 100% of GDP to be compared to either thing.
1 comments
pclmulqdq 998 days ago
The absolute value of the debt is related to an annual thing: the interest payments on that debt. Those interest payments account for almost 10% of the US federal budget now, and that number will only rise with interest rates.
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RC_ITR 995 days ago
The absolute value of the stock market is related to annual dividends.

>that number will only rise with interest rates.

Not if nominal GDP/the tax base grows faster. The thing most people miss (and I'm amazed at this given the past few years) is that the point of government debt is to grow the economy.

You can debate whether or not you think it's effective or if we are over-doing it, but you have to at least acknowledge that putting more money into the economy has the theoretical potential to created positive sustainable GDP, which increases the tax base.

Look at Hoover Dam for example - debt funded, but probably responsible for trillions of dollars of GDP over the years. [0]

https://www.federalreservehistory.org/essays/reconstruction-...

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