This post is prompted by Randy's comment to the original. Randy, first I want to thank you sincerely for your comments. I'm sincere when I ask for feedback and commentary. THX.
As for the Debt-to-GDP ratio, finally more people are reporting the true numbers. When I first drew attention the issue, even our governor, a friend, was quoting 64%. As I reported, the real debt:GDP when GDP was ~$14 trillion was 100%. Most recent estimate of GDP is closer $15 trillion, so the ratio is a bit less than 1:1. But, the new debt ceiling will rapidly take it to >100%....can't win!
The difference in what is quoted as 64-70% is essentially the "debt owed to ourselves" mostly IOUs in the SS trust fund. These are monies already owed by statute, and is money collected but diverted as loans (bonds on the balance sheet) into the general fund. The only way to discount this amount (~$5+ trillion) is to declare it won't be paid to current recipients or it will be monetized away....neither acceptable. It is what it is.
The additional amount of "debt" of ~$60 trillion is that projected to be owed under current laws to Medicare, Medicaid and SS recipients. So, this number is of different character, can change, and undoubtedly it will, with changes in the laws regulating these entitlements.... age requirements, means tests, max. amounts, colas, etc. Or, a tremendous growth in revenue!!! Not likely as I predict lack of growth in the economy. Of course, they can tax us more...and probably will.
So, as the statutes now set, the ratio of debt to GDP can be upped by that amount....legitimately.
I think you know this, but some will not. Thanks again for your interaction.
Undoubtedly, there will be change, but it will be very difficult. A big fight is coming.