Senate Republican Leader Mitch McConnell strained the facts when he claimed that, “We look a lot like Greece already.” The public debt of Greece is double that of the United States in relation to the size of each nation’s economy
McConnell made his comment in a July 6 news conference held prior to a meeting with President Obama. It’s an exaggeration he’s made before. In a June 23 appearance on the Fox News Network, for example, he said: “Look, we’ve got a $14 trillion debt. It’s as big as our economy. We look a lot like Greece.”
McConnell exaggerates.
He is correct that the total U.S. debt currently stands at $14.3 trillion, and will grow larger if Congress permits further borrowing. That’s not quite as large as the U.S. economy, but the most recent projection from the Congressional Budget Office put the total at over $15 trillion by the end of the current fiscal year, which ends Sept. 30, and said that was expected to total 100 percent of U.S. Gross Domestic Product (GDP) for the year.
That’s a serious matter, to be sure. But it’s not close to the size of Greece’s debt, which was 142.8 percent of that nation’s GDP as of the end of last year, according to the most recent figures from Eurostat, the official statistical office of the European Union.
Furthermore, McConnell is making an apples-to-oranges comparison.
The $14 trillion figure refers to “total debt outstanding,” much of which is money that the government owes to the Social Security trust funds and other governmental entities, not money actually borrowed from the public.
The U.S. “debt held by the public” is currently less than $9.8 trillion. That’s the proper figure to compare to what Greece owes, and in relation to GDP it’s currently less than half the Greek level. CBO most recently projected that it would reach 69 percent of GDP by the end of fiscal 2011.
And under CBO’s long-term projection, the U.S. public debt wouldn’t reach Greek proportions until 2029, even using CBO’s most relaistic, “alternative” fiscal scenario (which assumes for exampel that Congress won’t allow tax cuts to expire for most Americans, and will continue to defer steep scheduled cuts in Medicare payments to doctors.)
We won’t deny that there are some similarities. Red ink is flowing in about the same volume in relation to GDP. For all of last year, the Greek deficit abounted to 10.5 percent of its GDP, for example, while the U.S. deficit is expected to be 9.3 percent of GDP for the current fiscal year, under CBO’s analysis of the presidenti’s proposed budget.
And unless Washington makes some big changes there is no end in sight to the deficits, meaning debt will continue to grow larger. But at the moment — whatever it “looks like” through Sen. McConnell’s eyes — the fact is that the U.S. is not yet a fiscal wreck of Greek proportions.
CORRECTION: On July 8, this story was updated to correct a typographical error in the fourth paragraph. The sentence should say the Congressional Budget Office projected a U.S. deficit of more than $15 trillion, not $15 billion.