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Obama's budget plan would "take national debt up to about 80 percent of gross national product. ... Historically, it's been about 40 percent."
Judd Gregg on Wednesday, March 25th, 2009 in a Fox News interview
Judd Gregg says Obama's budget drives national debt to 80 percent of GDP
The Truth-O-Meter Says: True!
Obama's budget plan would "take national debt up to about 80 percent of gross national product. ... Historically, it's been about 40 percent."
Judd Gregg on Wednesday, March 25th, 2009 in a Fox News interview
Judd Gregg says Obama's budget drives national debt to 80 percent of GDP
The Truth-O-Meter Says: True!
PolitiFact.comRegardless, Gregg is right that 82 percent would be remarkably high and put the country in unenviable company.
So why should we care?
If the debt-to-GDP level were to go to 82 percent, Heritage's Riedl said, "It's a simple fact that interest rates would go through the roof."
Moreover, he said, it would be harder for companies to borrow money; harder for people to get mortgages. It would decrease productivity and overall economic growth.
"It's just not a sustainable ratio," Riedl said.
Jonathan DeWald, a spokesman for the Concord Coalition, a nonpartisan organization that specializes in analysis of budget deficits, also cautioned that as interest rates increase in coming years, interest payments on the growing national debt will continue to eat up more and more of the overall budget.