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More or Less: Behind the Stats

US National Debt: is $32 trillion a big number?

More or Less: Behind the Stats

BBC

Business, Mathematics, Science, News Commentary, News

4.63.5K Ratings

🗓️ 24 June 2023

⏱️ 9 minutes

🧾️ Download transcript

Summary

‘This episode was updated on 26th June to remove an error in how we quantified 32 trillion dollars’ The level of US government debt has just surpassed 32 trillion dollars. Negotiations over raising the borrowing limit once again went down to the wire a few weeks ago. But how concerned should we all be about how much the US government borrows? We investigate with the help of Kent Smetters, professor at the Wharton School of the University of Pennsylvania and Betsey Stevenson, Professor of Economics and Public Policy at the University of Michigan.

Transcript

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0:00.0

Hello and welcome to More or Less on the BBC World Service, where you'll weekly guide

0:06.4

to the numbers in the news and in life. And I'm Charlotte McDonald. Our email inbox is

0:12.8

often overflowing here at More or Less. But don't have that put you off emailing us at

0:17.2

more or less at bbc.co.uk. We might just be able to answer your question as we're about

0:23.2

to do with this brief and to the point message from loyal listener Andrew.

0:27.4

Subject. US National Debt. Is 31.4 trillion dollars a big number?

0:33.8

31.4 trillion dollars. That was the level of US National Debt earlier this month on June 12th

0:40.9

when Andrew sent his email. By June 23rd, the date we made this programme, Debt had actually

0:46.5

breached the 32 trillion mark. What's a few hundred billion between friends? Either way,

0:52.5

32 trillion sort of looks and feels a bit like a big number. It is 32 million millions

0:58.6

after all. If you're finding it all very hard to get your head around, think of it like

1:03.3

this. A million seconds is 12 days. A billion seconds is 31 years. And a trillion seconds

1:10.9

is 31,688 years. But is 32 trillion dollars a big number in the context of National Debt?

1:20.7

Betsy Stevenson, professor of economics and public policy at the University of Michigan.

1:26.0

She says the most useful way of getting an idea of the scale of what a country owes is

1:31.3

to measure the debt against a country's economic output per year. Otherwise known as GDP.

1:37.5

When we hear a number like 32 trillion, it might as well be 32-gajillion because nobody

1:45.0

knows what that means. So how do we make sense of it? And I think that's got to be the

1:49.6

starting places to figure out how to scale such a big number to be able to think about whether

1:57.0

that's a lot of debt or not a lot of debt. And one of the big tricks is you got to scale

2:04.3

it relative to something you understand. So when it comes to debt, the standard thing to do

2:09.8

is to scale it relative to GDP. And if you look at US debt relative to GDP, otherwise known as

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