The federal debt is a serious problem that requires attention, but perspective is in order.
America’s ratio of debt to gross domestic product is about 73 percent — uncomfortably high, but not out of line with other healthy nations. Canada and Germany, for example, have higher ratios. Greece is close to disaster with its debt-to-GDP ratio of 163 percent.
Debt always rises in times of recession. As anemic as the U.S. recovery has been, the deficit has fallen every year since 2009. Most of the reduction has been from tax revenue that comes with economic growth. In 2012, the deficit fell by $200 billion. Americans can expect it to fall more as revenues increase and unemployment falls.
Spending needs to come down, but our debt level should not inspire panic. America needs careful tax and spending reform, along with policies designed to promote revenue-generating economic growth.