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A Focus on Public Debt

In a short paper posted at the Mercatus Center, Veronique de Rugy begins by saying:

"The president and numerous politicians claim that the United States does not have an immediate crisis in terms of debt. The president has gone so far as to say, "In fact, for the next 10 years, it's gonna be in a sustainable place."

"The recent release of budget plans for fiscal year 2014 makes a proper perspective of projections of public debt even more important. This week’s chart shows the debt held by the public as a percentage of the gross domestic product (GDP) under various budget proposals."

She uses the following chart to help readers better understand the various proposals:

She concludes by saying:

"It’s hard to see how any of these budget plans represent a serious attempt to cut the debt, as most of the plans only leave us where we are today, if not worse off. Even the Ryan plan, which promises a 55 percent debt-to-GDP level by 2023, rests on optimistic GDP growth and revenue projections while failing to fully address the unsustainability of the current entitlement programs. The Ryan plan repeals Obama's health care law, but it pushes off urgent Medicare reforms until 2024 and leaves Social Security untouched.

"These plans prove that Washington lacks the commitment necessary to address the true drivers of the debt: spending for entitlement programs and interest costs on the debt itself.

Want to better understand America's public debt? Spend a few minutes studying this paper.

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