Is the debt scary? Are big numbers always scary? Is math scary?

There are Web sites that can help out those who want to know a little about large-scale money matters, or economics for dummies and those who are econ-curious. One such site is called Economics in Plain English
From Feb of 2011, which we might be calling the good old days in 2013, there is this post, which is informative without being too painful (to the non-nerds curious about economics, but not to those who want to know nothing about economics). 

$14.1T: AN AFFORDABLE LEVEL OF NATIONAL DEBT?
The United States’ current level of national debt is still affordable and consistent with several other nations. The problem, however, is that with the continued rate of growth in the debt experienced over the last 10 years it will not be affordable forever. National accounting statistics show clearly that the U.S.’s 96% national debt/GDP percentage is, in fact, above average compared with most other modern economies, but it is certainly not the highest as economies like Japan and Italy currently have debt/GDP levels at 204% and 130%, respectively. Moreover, the level of U.S. national debt as a percentage of GDP (96%) is relatively close to where it was back in 1950 after having financed World War II. Our nation’s highest level of debt relative to GDP was 121% back in 1945. The key point is that debt must be benchmarked to our nation’s income which is GDP. I find it interesting that if I tell someone that Bill Gates owes someone $10M they quickly can figure out that he’s probably fine, but if I tell the guy at Starbucks that the U.S. owes $14.1T they think the country must be ready to go bankrupt. Big numbers really scare people, so one needs a perspective.

How high should we do? Here's the suggestion made in that same post:
What should be the goal? I say a debt level of 67% of GDP should be the goal, which is a very average and affordable level of debt. It’s OK for debt to grow as long as it does not become too high relative to the size of our economy or GDP.


- jR (@AirFarceOne on Twitter)

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