An Interesting Link I Forgot Last Night

Cracked.com is just on lately.

With November coming on fast, here’s some important information for you to consider:

5 Things Everyone Gets Wrong About Government Spending

I would say that the writer neglected to mention something important in the section on debt.  See that second graph, the one that’s less scary but still can’t continue indefinitely?  That still-scary jump at the end includes the Great Recession, which created three factors that almost certainly won’t continue indefinitely:

1) Hugely reduced government revenue, because people who lose their jobs and houses pay fewer and lower taxes;

2) Hugely increased need for government spending, so those people who lose their jobs and houses don’t starve to death in the street; and finally

3) A much-reduced GDP, so any debt is, by definition, a larger percent of GDP.

Just something else to consider.

 

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