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View Diary: CBO cut its deficit projection by $200 billion (46 comments)

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  •  What evidence do you have... (3+ / 0-)

    That it becomes a problem?  Or that we are even close to the point where it becomes a problem?

    'Where free unions and collective bargaining are forbidden, freedom is lost' - Ronald Reagan, Communist

    by RichM on Tue May 14, 2013 at 01:00:52 PM PDT

    [ Parent ]

    •  Krugman has analyzed this extensively (3+ / 0-)

      and believes that with 400-500B deficits (and our $15T GDP), we should be okay. We're still running higher deficits, our accumulated debt is now about the same as our annual GDP, and our economic growth rate seems to be stalled in the low single-digits. Given that no one can predict the future, and that we may have large unexpected expenditures (for a future stimulus or a war), it is prudent for us to run with less debt than that maximally tolerable. That is why, for progressives, this is a good thing.

      The argument that no amount of debt is harmful is really not one we should be repeating.

      •  The standard gauge (2+ / 0-)
        Recommended by:
        Dr Swig Mcjigger, doc2

        is that deficits of 3% of GDP are sustainable in the long run. This is within your cited $400-$500B figure.

        WRT the % of overall debt to GDP, we had a decline of approx. 14% in just 5 years circa 1995-2000. I expect some revisions in projected overall debt by the CBO next year to bring similar good news.

        There was only one joker in L.A. sensitive enough to wear that scent...and I had to find out who he was!

        by virginislandsguy on Tue May 14, 2013 at 01:46:01 PM PDT

        [ Parent ]

        •  We're still pretty high (in debt) (1+ / 0-)
          Recommended by:
          virginislandsguy

          relative to historic norms. We're at about 100% of GDP, which is not quite as high as after WWII (which was about 125%), but then again we are not expecting another multi-decade boom period for the economy like what we experienced in the 1950s and 1960s. We should be focused on our debt levels; the problem with the Republicans is that they wanted too much focus and they wanted it at the worst possible time (in the aftermath of an economic collapse when debt levels justifiably should have gone higher, not lower). Some on the left are just as wrong when they maintain that debt is irrelevant.

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