Debt is misunderstood, and that makes it possible to frighten people. That was surely true in 1867 as it is today.The US annual debt, in absolute terms, is 12% of GDP. The total debt, 31 trillion, is 120%. Neither figure is an outlier. Nany countries have 10% or so annual debt, Norway for example has 12%, same as US. Canada, the UK, France and others have similar total debt levels as a percent of GDP.Americans are fooled by a few things. 1) US govts at all levels GATHER less tax than any other wealthy, modern country (26%, compared to OECD avg 34%.) 2) US govts SPEND less that almost any other country, 38%. 3) These smaller percents generate a larger relative deficit than other countries. We learned this about fractions in 6th grade, I think, but an awful lot of people have forgotten.The total deficit, 31 trillion, is so big because the US economy is so big. Finally, the low tax level is why it's assumed the US debt isn't a risk, in bond markets. If there was a crisis, say a war, the US has more room to raise taxes than others.

Debt is misunderstood, and that makes it possible to frighten people. That was surely true in 1867 as it is today.The US annual debt, in absolute terms, is 12% of GDP. The total debt, 31 trillion, is 120%. Neither figure is an outlier. Nany countries have 10% or so annual debt, Norway for example has 12%, same as US. Canada, the UK, France and others have similar total debt levels as a percent of GDP.Americans are fooled by a few things. 1) US govts at all levels GATHER less tax than any other wealthy, modern country (26%, compared to OECD avg 34%.) 2) US govts SPEND less that almost any other country, 38%. 3) These smaller percents generate a larger relative deficit than other countries. We learned this about fractions in 6th grade, I think, but an awful lot of people have forgotten.The total deficit, 31 trillion, is so big because the US economy is so big. Finally, the low tax level is why it's assumed the US debt isn't a risk, in bond markets. If there was a crisis, say a war, the US has more room to raise taxes than others.

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