Originally Posted by
Orko
Quote fr pol
"The problem is the debt to gdp ratio. Mathematically summarized as the size of your national debt divided by the size of your economy that is debt/GDP.
Intellectually one can deduce as much as your debt being the result of decades of government spending exceeding government income in other words spending/income > 1.
If you cut government spending the spending/income ratio will close in towards 1 eventually going <1.
However, if you cut government spending, this will simultaneously result in GDP, the size of your economy, to decrease.
In other words while you might reduce debt by 1 trillion, you will essentially cut GDP by 1 trillion as well.
The current debt is 36.4 trillion USD and the current GDP is 29.6 trillion USD. This gives a ratio of 1.229.
If you cut 1 trillion off of both you get 35.4 trillion USD in debt and 28.6 trillion USD in GDP. Ie a ratio of 1.237 that is to say an increase in debt to gdp.
Factor in tariffs wich will certainly have a negative effect on growth, as well as the tech bubble finally about to pop with China surpassing US companies, and you actually start to wonder is this the moment?
The correct solution would of course be to increase taxes from the 1 % since they hold a total wealth of 43 trillion USD, but this is of course not what Trump and his tech bros want, so they will basically do everything except tax the rich lol.
1. The government spending is not the problem. As I have already explained, you will not reduce debt by decreasing government spending because the debt far exceed the GDP. If you cut government spending by 1 trillion you effectively cut GDP by 1 trillion, and this will worsen your debt to gdp ratio.
2. The problem is that the US isn’t taxing the top 1 % or even top 10 % nearly enough. They hold 70 % of all private wealth yet pay hardly any taxes. The US is unique in its low taxation of the wealthy.
3. The US government expediture itself is comparably small when you look at other developed economies:"
