Frequently, members of
the political class will say things like "Deficits don't matter" (Dick Cheney).
The logic used to justify opinions like this usually involves invoking the
federal debt-to-GDP ratio after World War II of 120% versus about 100% today.
Obviously, the debt is larger now in nominal terms than it was then, but a lot
of inflation and population growth have occurred since then. While federal debt
outstanding is relatively straightforward to come up with, GDP is a more awkward
concept. For starters, not all GDP dollars are created equal. If I sue you and
you sue me back for X amount of money within the same year, 2X is added to GDP
even though neither of us is better off than before. For a more elaborate
explanation as to why GDP is a relatively useless metric, I turn t
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