Vivek Ramaswamy Is Wrong About the National Debt
If you want to get a politician to change the subject, ask them how they’re going to deal with the federal debt, which is growing to be bigger than the U.S. gross domestic product and has us on a path to fiscal disaster. Economists across the political spectrum agree that large, persistent, and growing annual deficits and the national debt depress long-term economic growth, the one known way to increase living standards.
When Reason asked GOP presidential candidate Vivek Ramaswamy what he would do to cut spending, he said he’d focus instead on supercharging the economy so that we can grow our way out of it. Unlike Joe Biden and Donald Trump—who have both sworn that they won’t touch a penny of Social Security and Medicare, the major drivers of debt—the millennial and self-described limited-government conservative at least acknowledges that debt is a problem. He just won’t commit to any spending cuts to deal with it.
“We’ve [had] more than 4-plus percent GDP growth for most of our national history,” he says. “If we get back to…three-point-something, actually, most of those fiscal problems are completely gone.”
But that’s not right. According to quarterly data from the Bureau of Economic Analysis, we calculate that annual GDP growth has averaged 2.7 percent since 1970, helped along by a rapidly growing labor force thanks to immigration, the baby boom, and women going to work. Let’s say Ramaswamy gets elected for two terms and unleashes economic growth that pushes the U.S. economy up to 4 percent GDP growth through 2033. Would most of our fiscal proble
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