Consider this graph (based on Penn Wharton Budget Model scoring, from the Economist):
Category Archives: deficits
Choi, Dang, Kirpalani, Perez on “Exorbitant privilege and the sustainability of US public debt”
From the paper abstract:
When Did the Debt-to-GDP Ratio Jump in the Last Decade?
Federal debt held by the public as a share of GDP:
Vote Trump for Higher Inflation, Bigger Deficits, Higher Interest Rates
Messages from the WSJ July Survey:
Currency Misalignment Measured Assuming a Balanced Financial Account
The Coalition for a Prosperous America and the Blue Collar Dollar Institute have developed a measure of currency misalignment, reported in their latest Currency Misalignment Monitor (April issue).
Thinking about Trade War II
A flurry of investment bank newsletters (Wells Fargo, GS) impels me to look at what happened to the aggregate trade balance in the wake of Trump’s tariff hikes:
Math Is Hard!
Steven Kopits writes:
On the other hand, interest payments have risen from 9.5% of GDP in 2020 to 13.6% of GDP in 2023. That is a whopping 4% of GDP in just increased interest payments. Further, as the incumbent debt is rolling off and has to be refinanced, interest payments will continue to rise, and fall with considerable delay even when inflation and interest rates return to lower levels.
Year-on-Year Change in Federal Debt to GDP or Potential GDP
Reader Bruce Hall notes the extreme jump in debt-to-GDP in 2020 was attributable in part to the public health economic lockdowns, to wit:
But the economic shutdowns certainly affected the equation’s denominator in 2020.
I note that using the counterfactual potential GDP as estimated by CBO does not change the picture substantively – I add the red line to the blue line shown in the previous post.
Some Pictures of Federal Debt
Senatorial candidate Hovde presents this picture.
Divergence in Interest Rate Projections
CBO projection and SPF mean forecast diverge, by nearly a percentage point in 2024.