Macroeconomics (Fourth Edition)
4th Edition
ISBN: 9780393603767
Author: Charles I. Jones
Publisher: W. W. Norton & Company
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Question
Chapter 18, Problem 5E
(a)
To determine
The growth rate of debt when there is a primary deficit.
(b)
To determine
The growth rate of debt when government keeps total budget balances.
(c)
To determine
Impact on debt-GDP ratio when GDP increases at 4 percent.
(d)
To determine
Check whether the situation in part (c) is sustainable or not.
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At the beginning of 2009, a government had a total debt of $540 billion dollars. It
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The U.S. debt is $28.9 trillion as of Nov. 6, 2021. and each citizen's share of this debt is over $86,939 considering the population of about 330 million.(https://www.usdebtclock.org/) Even our national debt has continued to increase an average of over $2 billion per day since September 30, 2012, and currently US federal debt to GDP ratio reached 128.12% in the middle of COVID-19 pandemic. What do you think about the public debt in the U.S.? Do you think it is a myth to overly concern about the debt? Or, would it be a significant problem for our future generations as well as current generation? Discuss.
In 2019, the U.S. government’s total debt reached $21.2 trillion, approximately equal to 105.3% of GDP. At the time, according to the U.S. Treasury, the average interest rate paid by the government on its debt was 1.3%.At what rate would nominal GDP have to grow in order for the debt-to-GDP ratio to remain unchanged when the deficit in 2020 is $600 billion?
Answer with detailed workings.
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