Monday, 12 February 2018

Politifact.com judges these words of USA Senator Rand Paul as 'Mostly True': USA debt doubled under both George W. Bush and Barrack Obama and is on course to touch $30 trillion in next 7 years or so

Rand Paul gets numbers right in speech on federal debt, http://www.politifact.com/truth-o-meter/statements/2018/feb/09/rand-paul/rand-paul-gets-numbers-right-speech-federal-debt/, dated Feb. 9th 2018.

The relevant quote of USA Senator Rand Paul (Republican-Kentucky) from a recent USA Senate speech of his which was judged as 'Mostly True' by Politifact.com, is: "George W. Bush doubled the debt from $5 trillion to $10 trillion. President Obama doubled the debt from $10 trillion to $20 trillion. Now we're on course to exceed $30 trillion in the next seven years or so."

Sen. Paul also said in one of his recent Senate speeches that the debt to GDP ratio of the USA has crossed the danger mark of 100% as the USA economy size is $17 to $18 trillion.

I am NOT an expert on such economics stuff but the 1991 financial crisis that India went through and which Dr. Manmohan Singh as Finance minister under Prime Minister Shri P.V. Narasimha Rao (who hailed from Andhra Pradesh) steered India out of, and 2007-08 USA and global financial crisis which triggered the Great Recession in the USA and which thankfully the USA is out of now (thanks to its economy fire-fighter Treasury secretaries like Tim Geithner and other economy management leaders, under USA president Barrack Obama), have been the two scariest periods that I have gone through in my life so far. They severely threatened the financial security of most middle class Indians including me (and middle class people of many other countries in the 2007-08 financial crisis). The 2007-08 financial crisis threat to India was not that well understood or felt by most Indians as the Indian economy did not get into a recession. But the Indian economy then was deeply tied into the Western world (rich nations) economies, and so the people-in-the-know about these matters were very worried about the possibility then of Indian economy too going into a recession. Today in 2018 I think there are other world financial institutions (led by China) besides the Western nations dominated World Bank and IMF, and so there is higher level of protection to Asian economies from any damaging impacts of Western economies. It was NOT SO in 2007-08.

I do look at the top-level economy health metrics to get a feel of how some countries' economies are doing, with India and USA economies being of particular interest to me. The debt-to-GDP ratio of the USA going beyond 100% and the possibility of that growing in the coming years if the USA economy GDP does not grow faster than its debt, which is what Sen. Rand Paul seemed to be hinting at in his recent Senate speeches, is quite a disturbing thing for me.

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