Debt to GDP, Highest Since WWII

STOP THE SPENDING — CBO: Debt to GDP to reach 62% this year, but don’t worry, it should stabilize around 67%. GDP to Debt has averaged about 36% since WWII. Happy yet? At that rate the debt can never be paid off.

The national debt will reach 62 percent of gross domestic product (GDP) by the end of this year, the nonpartisan Congressional Budget Office (CBO) said Wednesday.

The budget office said the debt will reach its highest percentage of GDP since the end of World War II. The jump is driven by lower tax revenues and higher federal spending in the recent recession.

And while the national debt would stabilize at 67 percent of GDP over the next decade if current law were maintained, extending tax cuts enacted during the administration of President George W. Bush and keeping growth in appropriations in line with inflation would mean that the debt would reach almost 90 percent of GDP by 2020.

By contrast, GDP has averaged “a little above” 36 percent per year over the past 40 years.

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