Kenobi on Nostr: In other words, Deficit spending is part of GDP, and also part of Debt. Thus, GOV ...
In other words, Deficit spending is part of GDP, and also part of Debt.
Thus, GOV DEBT/GDP has Deficit on top and bottom.
If you add 5 to the top, you add 5 to the bottom.
If Debt 35T, and GDP 25T (the USA now) you have: 35/25=1,4 (or 140%).
Then, for example, deficit is 10T (actual deficit is like 3T) since Deficit is Spending it is part of GDP (since GDP is the sumation of all spenditure), but deficit is also debt.
Then, you have (35+10)/(25+10) = 45/35 = 1.29 (or 129%).
VOILA! Your Debt to GDP decreased, your government’s finances are now healthier.
Shhhh 🤫🤫 don’t talk about the inflation 10T would generate.
Thus, GOV DEBT/GDP has Deficit on top and bottom.
If you add 5 to the top, you add 5 to the bottom.
If Debt 35T, and GDP 25T (the USA now) you have: 35/25=1,4 (or 140%).
Then, for example, deficit is 10T (actual deficit is like 3T) since Deficit is Spending it is part of GDP (since GDP is the sumation of all spenditure), but deficit is also debt.
Then, you have (35+10)/(25+10) = 45/35 = 1.29 (or 129%).
VOILA! Your Debt to GDP decreased, your government’s finances are now healthier.
Shhhh 🤫🤫 don’t talk about the inflation 10T would generate.