Fiscal Debt Will Grow, Grinding Real Economic Growth Lower
One of my favorite charts from "Stagflation Is imminent", which we published over three years ago in March 2021. It was an easy call.
At the time of publishing (March 2021) we pegged Debt to GDP at approx 125-130% for year-end 2024. CBO's estimate was approx 102%. The actual figure was 122% as of Q2 2024.
Debt as a percentage of GDP will grow higher under a Trump or Harris Administration. Whomever is elected will try to spend their way out of the economic mess (high fiscal debt, high fiscal deficits, low productivity, high prices for goods and services, high unfunded entitlement liabilities), the U.S. is in. Doing so will drive fiscal debt and deficits higher while grinding economic activity lower.
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