GAO doom and gloom report

[cannon_fodder]

Bringing up the Voice of America in a discussion about Medicaid is a bit out of left field, but OK.

The VOA's budget at its peak was just over $500 million.  As sad as that may be, its a drop in the bucket.  Of all the budget issues on the table, the 500mil for VOA is a joke.  Congress probably spends that much on their air vouchers.

The $500,000,000.00 would fund Medicaid for about a day and a half.

I think you are missing the big picture.

[tim huntzinger]

No, Lord, You are missing the 'big picture.'  Wasteful spending is a problem now, the debt is a problem now.  Watch the pennies and the dollars take care of themselves.  Why is the % of GDP OK now, but not OK later? Will the economy not continue to grow to make up the difference?

[cannon_fodder]

No Tim, the debt is growing faster than the economy is.  Thus, as time goes on and we continue to spend the debt to asset ratio (Debt to GDP) will decline. Our 60% GDP debt load is in line with most of the developed world.

If the debt to GDP ratio remained constant it would not matter how large our debt grew.  If we had $7 quadrillion in debt it would not matter if our GDP was $14 quadrillion.  The number itself is meaningless, it's relation to our earnings is all that really matters.  My fear is that relation is changing and will change in a negative direction.

[tim huntzinger]

But the trickle-down effect will take care of the rest of us, will it not? Y'know, the bankers and investors will be making great dividends off the interest, the Grays will have to buy their Depends and Harleys, and more people will be employed in the health care field.  The Free Market will take care of us, it is our fault that we do not understand how it will all work.  Do not fret, Lord!

[Conan71]

quote:Originally posted by cannon_fodder

No Tim, the debt is growing faster than the economy is.  Thus, as time goes on and we continue to spend the debt to asset ratio (Debt to GDP) will decline. Our 60% GDP debt load is in line with most of the developed world.

If the debt to GDP ratio remained constant it would not matter how large our debt grew.  If we had $7 quadrillion in debt it would not matter if our GDP was $14 quadrillion.  The number itself is meaningless, it's relation to our earnings is all that really matters.  My fear is that relation is changing and will change in a negative direction.

That's all fine and good, but what about the drain on gov't revenues servicing the interest on the debt?  Gotta bear with me, I'm a little hawkish when it comes to gov't spending.