July 10, 2016
No, I’m not engaging in name calling, this is based on Barton Swaim’s self-description of his abilities in his Washington Post column on the United States being in decline. Swaim, a contributing columnist to the Washington Post complained to readers that the United States is becoming a European-style regulatory state, then added:
“…neither the country’s political class nor its voters seem to care that the national debt has reached literally incomprehensible levels…”
In fact, the numerate among us have little difficulty comprehending the level of debt. If we look at the publicly held debt, it’s a bit more than 75 percent of GDP. If we include the debt held by Social Security and other government trust funds it is a bit more than 100 percent of GDP.
Of greater relevance than these debt to GDP figures is the interest burden associated with the debt. Currently this is around 0.8 percent of GDP, after we net out the money rebated from the Fed. This compares to an interest burden of over 3.0 percent of GDP in the early 1990s.
This article referring to the debt by someone who claims that he finds it “literally incomprehensible,” follows by a day a NYT column by Steven Rattner who told readers that he found Social Security and Medicare’s projected shortfalls “terrifying.”
It might be helpful if these papers could insist that the people who write on the debt and deficit have some understanding of the issues, as opposed to people who by their own admission find the topics “literally incomprehensible” or “terrifying.” If Swaim had a better understanding of the debt he might have even re-evaluated his thesis that the United States is in decline.
I should add that the United States today has a much larger implicit liability, relative to the size of the economy, in the form of patent and copyright liabilities than would have been the case in prior decades. These are commitments that the government has made of the public’s money to the holders of these property claims in order to compensate them for innovative and creative work. Unfortunately, there is no record of the size of these commitments in the government’s accounts.
Comments