Friday, March 1, 2013

Sources of Projected US Debt to GDP Ratios

This is the updated version of the debt to GDP ratios for the US through 2019.  The projections are based upon projections from the Congressional Budget Office.  The Bush era tax cuts, most of which have been made permanent by the Obama administration and Congress, along with the effects of the recession, account for the bulk of the projected deficit growth.  The Bush tax cuts, and the loss of tax revenue during the downturn is much like what happens to a business when revenues decline.  On top of the lost revenue expenses also increased.  Wars are not cheap,  and the expenses incurred continue long after the wars are ended.  If the US were a business, its stock price would have declined and the management would have been replaced.  The electorate, however, is poorly informed relative to those who invest in stocks.  The electorate gets most of its information from TV, and other media sources.  Investors make lots of mistakes but they have better sources of information.



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