National Debt Consequences
Do national debts that exceed 90% of nations' economies typically harm economic growth?
Correct Answer
Considerable (but not definitive) evidence indicates that national debts beyond 90% of nations' economies harm economic growth. Many media outlets have reported on a study from 2013 that supposedly disproved this fact, but the study actually showed what previous studies had found: economic growth typically declines by about 30% when government debt exceeds 90% of gross domestic product (GDP). The authors of this study, however, buried this fact on the tenth page of their report and published a misleading overview, which the media parroted. The U.S. national debt currently stands at 127% of GDP, well above 90% and higher than any other era of the nation's history.
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