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by divbzero 42 days ago
GDP provides a rough measure for how fast a country could drain its debt—similar to looking at debt-to-income ratio when issuing mortgages to individuals.
2 comments
Zigurd 42 days ago
Nations also have debt to income ratios. We should be comparing those instead of debt to GDP. If you've ever seen one of those UK is poor than Alabama memes, you know that GDP is a poor and tendentious measure of well-being because UK quality of life measures put it above all about the richest states in the US.
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j16sdiz 42 days ago
"debt" here is government debt -- federal debt to be precise.

"GDP" is just a measurement of economic activity. It is not a measurement of income. It is not government income. It is not even government cash flow.

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lesuorac 42 days ago
Given that US largely taxes income and capital gains both of which are related to GDP it's a fine proxy.
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