Released October 16, 2009
RALEIGH, N.C. – A couple of weeks ago, the Congressional Budget Office announced the national debt will be $2 trillion higher in 2019 than previously estimated. If this is accurate, it means the national debt will have doubled between 2009 and 2019. Will this be just too much for our economy to bear?
Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:
"This is a source of a lot of controversy and discussion right now, and the numbers indicate that the national debt will be $14 trillion in 2019. That's the latest estimate from the Congressional Budget Office.
These big numbers are always unfathomable to people, so what you need to look at here is the debt as a percent of the economy. That's the way economists look at this, and what will happen if these numbers are true is that the debt as a percent of the economy will grow from 63 percent of the economy to 68 percent of the economy in 2019.
A couple of points here. No one's ever going to be presented with the bill. It's popular to take the national debt and divide it by the number of people, and say this is what each of us owes. We're never going to get a bill. The debt can be continually refinanced, if you will, over time.
The real way, in my opinion and economists' opinion, to look at the cost, for example, of additional national debt is to say, how much more is this going to cost to service that debt, the interest on that debt. And the additional interest that we will have to pay in the next 10 years on that new national debt is about $3 trillion.
The question is, is it better to spend $3 trillion that way, servicing the national debt and then all that the national debt buys, or is it better to spend $3 trillion in another way, for example, in the private sector. I think that's the essential question that our public decision makers have to answer."
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http://www.ncsu.edu/project/calscommblogs/news/archives/2009/10/economic_perspe_470.html
