[U.S.] Federal Debt: Frog in the Pot?
My article in the 2024Q2 "Milken Review"; yes, I know Jim Fallows hates the "frog in a pot" trope as simply wrong—a real frog would hop out of the pot long before danger time. But a country's...
My article in the 2024Q2 "Milken Review"; yes, I know Jim Fallows hates the "frog in a pot" trope as simply wrong—a real frog would hop out of the pot long before danger time. But a country’s political system?…
By this time, you must know the drill: the federal debt held by the public (which excludes debt held by government agencies) reached $26.5 trillion at the end of 2023. That’s a whole lot of money – enough in $100 bills laid out end to end to reach two-thirds of the way to Mars (admittedly, only at Mars’s closest approach to Earth). So when is the whole Rube Goldberg structure of borrowing more to recycle a growing debt going to collapse? And what would that mean for the stability of the economy, not to mention the government? ¶ Start with a somewhat reassuring clarification. If you owe $1 million, have no valuable assets and your income is $50,000 a year, the repo man may soon be at the door. But if you owe $1 million, own a 12-bed-room home in Beverly Hills free and clear, and are taking home $600,000 a year from the family business, well... lucky you.
Ups and Downs & Ups
Likewise, the federal debt needs context. And the most useful rough-and-ready way is to compare the debt to annual GDP across the decades. So here we go.
Over at Milken Review: <https://www.milkenreview.org/articles/federal-debt?IssueID=53>
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