It all sounds so wonderful and innovative and compassionate. And even better – somebody else is paying for it all. We think.
Now our debt, at over $16 trillion, is bigger than our whole economy. More than 100% of our GDP.
Investment guru Bill Gross, of PIMCO in Newport Beach, California, has been writing that the “new normal” for economic growth in the US will be below its historic average.
What is one of the major reasons why? He cites research by Harvard economists Carmen Reinhart and Ken Rogoff which shows that “for the past 200 years, once a country exceeded 90 percent debt/GDP ratio, economic growth slowed by nearly 2 percent….for an average duration of nearly a decade.”
Part of President Obama’s proposal to bypass the “fiscal cliff” is to get rid of the requirement that Congress must approve increases in the debt limit. I wonder why?
It’s time for responsible behavior and hard choices. If we can’t just cut spending, let the “fiscal cliff” kick in.