07-24-2020, 10:57 AM
In 1946 nominal GDP was $228 billion; debt was $242 billion, so about 106% of GDP. At the time, it probably seemed like that amount "could never be paid back".
Our GDP currently is $21 trillion, so the debt is about 25% higher than GDP. Although it seems impossible to pay back, with 2% GDP growth and 2% inflation (nominal GDP growth of 4%), the GDP in 50 years will be almost $150 trillion, so our current debt of $27 trillion will be easily manageable. If you run the economy hot and allow for higher inflation (say, 3%), GDP will be $240 trillion The issue is, of course, not running a deficit between now and then.
BC
Our GDP currently is $21 trillion, so the debt is about 25% higher than GDP. Although it seems impossible to pay back, with 2% GDP growth and 2% inflation (nominal GDP growth of 4%), the GDP in 50 years will be almost $150 trillion, so our current debt of $27 trillion will be easily manageable. If you run the economy hot and allow for higher inflation (say, 3%), GDP will be $240 trillion The issue is, of course, not running a deficit between now and then.
BC