Someone told me today via email that we need democrats in congress because "the national debt as a percentage of GDP is at record levels." They are very wrong.
I wrote back this couldn't be further from the truth.
National debt was 117.5, 121.7 and 110.3 percent of GDP in 1945, 1946 and 1947. This was right after World War Two when the US spent a fortune to rebuild Europe and Japan after we defeated both in the war while eliminating Hitler.
Today the national debt as a percentage of GDP is estimated to be 66.1%, nearly half what it was when we were rebuilding Europe and Japan much like we are attempting to do today in Iraq.
More data:
- Graph of National Debt as a % of GDP
- Raw Data for National Debt as a percentage of GDP 1940-2006
- A liberal web site where I got the data (Proof some conservatives didn't make it up)
Now we are a couple of years past throwing Saddam out of Iraq and we've spent a small fortune trying to help Iraq become a democracy, much like we helped Germany and Japan after WW II. You can argue the war in Iraq was wrong just as many say Hitler never attacked us but that is a different issue.
Despite all the money we spent in Europe and Japan after World War Two ended, we spent a fortune fighting the cold war againt Communism including two "police actions" against Korea and Viet Nam. It took Ronald Regan “outspending the former USSR” to bankrupt the former Soviet Union and win the cold war before we got the "peace dividend" that gave us the prosperity of the 1990's. The actual budget surplus came when the GOP won congress and gave us gridlock with Bill Clinton, a democrat, as president. With no new spending for a few years and capital gains from the stock market bubble caused by the peace dividend (telecom boom) we actually had a budget surplus, but that was already in decline while Bill Clinton was still in office.
For more discussion or debate what I say, see:
DISCLAIMER: Answers & my words are general in nature, are not meant as specific investment advice, and do not necessarily represent the opinion of anyone but Kirk. Individuals should consult with their own advisors for specific investment advice.
