THE ECONOMY: "Ten Bullets" To Shoot Down The Democrats' Big Lie

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[Willie Green]

7. The Federal Deficit As A Percentage Of GDP

Comparing the Federal Deficit to GDP is an irrelevant and meaningless statistic. Worse, it is a misleading comparison in that it ignores other forms of debt that must be serviced by our nation's domestic economic activity. This includes not only our National debt, but also debt accrued by state and local governments as well as private debt incurred by businesses and individuals.

It is more appropriate to view federal deficit spending in the same manner as any other institution, organization or individual that is borrowing money to finance expenditures that exceed current income. In addition to revenue and expenses, one must consider the amount of debt already incurred and the proportion of revenue that must be allocated to service the interest on that debt.

For FY 2003, interest paid on the National Debt was $318 billion, or roughly 18% of federal revenue for that year. For the first 5 months of FY 2004, the Treasury has already spent over $143 billion in interest expense. These figures are not "irrelevant", and more responsibly challenge government's propensity to burden posterity with perpetual debt.

[satchmodog9]

bump

[lilylangtree]

This is great info in the big fight. I'm forwarding to the people in my email address book plus keep a copy within hands reach.

[lasereye]

For FY 2003, interest paid on the National Debt was $318 billion, or roughly 18% of federal revenue for that year.

So how does that compare with other periods?

[exDemMom]

Thanks for putting this together! It's nice to see all the facts in a nice tidy package.

[Tamzee]

Thanks for the incredible research and fact sheet.... I didn't think I could possibly find anything along these lines that I liked better than your shockwave ad. Now I'm torn ;-)

http://members.cox.net/macallan_the/GW/GWBush1_Start.htm

[oceanview]

and its not looking too good for Friday's jobs report:

http://biz.yahoo.com/rb/040331/economy_4.html

[speekinout]

Uh, no. The home indebtness rate is higher than anytime in history. American home debtors have less equity in their homes than any other time in recorded history.

That's probably true. Interest rates are at an all-time low, so most people are buying more expensive homes than they otherwise could. The mortgages are definitely affordable.
And banks & loan companies can put together deals that amount to 0% down, which wasn't always possible.

So, while it's true that people owe more on homes than they ever did, more people than ever own homes, and those are bigger and better ones than they could have just a few years ago.

[oceanview]

and that is exactly the problem. people have that impression because of what is happening with jobs, especially white collar ones in sectors being hit by offshoring. and these gas prices will only make it worse. the economy is the #1 problem for Bush. We are lucky Kerry seems unable to find a consistent message on the economy.

[sixmil]

6. National Debt per American Citizen - 1940-1950: Increased at 11.2% annual rate. (WWII and reconstruction) 1990-2000: Increased at 1.6% annual rate. (no lengthy military conflicts) 2000-2004: Increased at 2.5% annual rate. (Afghanistan, Iraq, reconstruction and war on terror) * The national debt per citizen is growing at a rate nearly equal to the "peace-time" rate of the 1990s.

2.5 is more than 50% greater than 1.6. You are really stretching things to call those nearly equal. Based on a $7 trillion debt, we're talking about $63 billion. Compounded over one presidential term, you are looking at 6.6% versus 10.4%. You have some points, but #6 is like the kind of spin we used to get from the democrats.

[sport]

Bump

[The_Macallan]

That's why I posted the '40-'50 data for a wartime/reconstruction comparison.

I understand your point though.

Actually I'm not trying to discount the debt, I'm just putting it rightfully between "all-out war" economy of WWII and "peace-time" economy of 1990s.

[FreeReign]

Comparing the Federal Deficit to GDP is an irrelevant and meaningless statistic.

Comparing the Federal Deficit to GDP is relevant and meaningful.

Worse, it is a misleading comparison in that it ignores other forms of debt that must be serviced by our nation's domestic economic activity. This includes not only our National debt, but also debt accrued by state and local governments as well as private debt incurred by businesses and individuals.

Comparing apples to apples is meaningful when -- you are comparing apples. Apples are the federal deficit. Everything else is oranges...except for individual debt which is your own problem.

[sixmil]

Actually I'm not trying to discount the debt, I'm just putting it rightfully between "all-out war" economy of WWII and "peace-time" economy of 1990s.

I understand, but it is a little worriesome that a good deal of that extra spending isn't even related to the war on terror. Bush's economic record is much better than the dems claim, but I believe we can always do better.

[Arthur Wildfire! March]

This is the weird part: the economy is one of Bush's strengths. The only weakness he has is media spin, which will be dealt with at some point. I'm just glad that people here are on the cutting edge and helping Truth overcome the lies. FReegards....

[Willie Green]

Comparing the Federal Deficit to GDP is relevant and meaningful.

Only if you're a Big Government statist who believes that there is no distinct difference between the financial affairs of the Federal Government and those of the private sector and state and local governments.

You're mixing apples and oranges. The federal deficit is a measure of federal government financial responsibility only. GDP is a measure of our overall national economic activity. The comparison of the two is meaningless unless one also takes into account the deficits and debts accrued by the private and state/local government sectors.

[lelio]

Only if you're a Big Government statist who believes that there is no distinct difference between the financial affairs of the Federal Government and those of the private sector and state and local governments.

I'll have to type in an op-ed piece to the WSJ by a Columbia prof that's done some advisory work for Bush. In a nutshell he asks what's the difference between personal debt and federal debt, its just debt that's the kids are going to have to pay.

I can't believe he equated an idiot neighbor that bought a plasma TV on credit when he can barely make payments on his SUV to the feds. Personal debt is settled by that individual, or those that were dumb enough to loan him money. The later is settled by me.

I'm getting the feeling that our economic leaders are parroting the old Wendy's commercial of "parts is parts."

[1rudeboy]

#10 will sting some a little bit. LOL
Don't you understand that you are to accept the premise that we are sliding into Thirld World status without question?

[Willie Green]

I'm getting the feeling that our economic leaders are parroting the old Wendy's commercial of "parts is parts."

That was Frank Perdue.
But I agree with what you're saying.

[sionnsar]

Wonder what today’s numbers look like, by comparison.