“So we’ve been trying to bring down the spending, and we are going to grow the revenue side. So we are going to grow the [gross domestic product] faster than the debt grows, and that will stabilize the debt-to-GDP [ratio],”
“So we’ve been trying to bring down the spending”: means we have failed to bring down spending, all the DOGE savings have been mopped up by more tax cuts and more spending on interest, military, and then some.
“and we are going to grow the revenue side.” Jus’ like that! Abracadabra …. revenue …. GROW! Even while we are increasing tax cuts
“So we are going to grow the [gross domestic product] faster than the debt grows” which, as we’ve just applied for an extra $4tn of debt in the Big Beautiful Bill means we are going to grow GDP by more than $4tn, or 13.7% – just to stand still on an irrelevant number:
“and that will stabilize the debt-to-GDP [ratio],” which is a magic flummery number which really means that debt is going to increase no matter what we do, which means that, all other revenues and expenses staying the same interest payments must go up, so next year we’ll need a greater increase in the debt ceiling (and thus a greater increase in GDP) simply to stand still and so on and on.
Because debt is already higher than GDP, stabilising the ratio simply means that in $$$ terms debt will continue to increase more than GDP $$$ increase. More debt, more USTs, more interest.
But, it’s much worse than that. Increasing GDP by $4tn only brings another 13.7% of revenue into the govt coffers, or $550bn in extra revenue. Bessent is pretending that turnover = profit. So all that magic wand stuff will not “stabilise the debt-to-GDP ratio” anyway. The debt will grow by $3.5tn.
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