3 ms·
> For example, if an individual owes 120% of their year income The government doesn't have GDP as income like an individual. An individual can easily cut down
by Jensson 3y ago
> For example, if an individual owes 120% of their year income
The government doesn't have GDP as income like an individual. An individual can easily cut down on spending without impacting their income, they can eat cheaper, consume less, move to a smaller place and still keep the same job. The same doesn't apply to countries, if the US government starts to cut down on expenses you will see that GDP figure go down a ton as well causing a massive economic crash.
- bhag2066 3y agoWas about to say the same thing. If you wanted to make this comment a better but not perfect comparison is the US federal budget which was $6.2 trillion in 2023. Debt is $34 trillion making the ratio 550%. Of course the US government can't spend their entire budget on debt servicing and repayment, just like a household.