{"id":210773,"date":"2024-03-06T23:45:48","date_gmt":"2024-03-06T23:45:48","guid":{"rendered":"https:\/\/michigandigitalnews.com\/index.php\/2024\/03\/06\/year-on-year-change-in-federal-debt-to-gdp-or-potential-gdp\/"},"modified":"2025-06-25T17:21:08","modified_gmt":"2025-06-25T17:21:08","slug":"year-on-year-change-in-federal-debt-to-gdp-or-potential-gdp","status":"publish","type":"post","link":"https:\/\/michigandigitalnews.com\/index.php\/2024\/03\/06\/year-on-year-change-in-federal-debt-to-gdp-or-potential-gdp\/","title":{"rendered":"Year-on-Year Change in Federal Debt to GDP or Potential GDP"},"content":{"rendered":"

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Reader Bruce Hall<\/a> notes the extreme jump in debt-to-GDP in 2020 was attributable in part to the public health economic lockdowns, to wit:<\/p>\n

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But the economic shutdowns certainly affected the equation\u2019s denominator in 2020.<\/p>\n<\/blockquote>\n

I note that using the counterfactual potential GDP as estimated by CBO does not change the picture substantively \u2013 I add the red line to the blue line shown in the previous post<\/a>.<\/p>\n

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Figure 1:\u00a0<\/strong> Year-on-Year percentage point change in Federal debt held by public to GDP ratio (blue). Year-on-Year percentage point change in Federal debt held by public to potential GDP ratio (red). NBER defined peak-to-trough recession dates shaded gray. Orange dashed lines at beginning ond end of Trump administration, dated 2017Q1, 2020Q4. Source: US Treasury via FRED, BEA, CBO (February 2024), NBER, and author\u2019s calculations.<\/em><\/p>\n<\/p><\/div>\n

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