Anyway You Look At It, The National Debt Is Bad
Paul Craig Roberts' assumption that the debt is small compared with 1946 (127% of gross national product) is simplistic and irrelevant ("The deficit isn't public enemy No. 1," Economic Viewpoint, Nov. 9). In 1946, the U.S. owned world exports because all of our competitors were blown to bits. We had tremendous pent-up demand for virtually any consumer product. Ten years of depression and five years of war created that. This resulted in tremendous job growth.
Contrast that to today's situation: A growing number of able competitors, a work force poorly prepared for high-technology employment, an aging population consuming entitlements at an ever greater rate, fewer families being formed to fuel the consumer-products market and pay for entitlement programs, and no job growth.
Currently, we are doing nothing to reduce the deficit. If next year's deficit is $400 billion, that will grow the debt by about 10%. Show me an economy that is growing its productivity by 10% a year. There are none. The only way we can grow out of this debt is by balancing the budget so that the debt no longer grows. Until then, the percentage of taxes swallowed by the debt will increase every year.
For my part, I would just as soon not test the 127% level again.
Dennis L. Roubal
Financial Growth Concepts
Editor's note: Paul Craig Roberts responds that since 1985, the growth of U.S. manufacturing exports has far outstripped the growth of Japanese and German exports--and that today's exports are a larger share of GDP than in the immediate postwar period.