Paul Krugman is an idiot – Actual Debt to GDP 146%?

I was trying to get through the video with Ron Paul and Paul Krugman, but I just couldn’t do it. Krugman is just too idiotic and, frankly, painful to listen to. But I did make it in far enough that I watched him say, with a straight face, that he would be okay with us getting to 130% Debt to GDP in order to get us out of this… you know, I don’t think he even said recession, but its past that and I will just call it what it is. A depression. But the problem is, we are already so far past the 130% number that it isn’t even funny. Scary in fact. Krugman’s prescription of printing ever more money worked well in the past because at that time we were only destroying the future. But the future has arrived, and continued inflation is no longer just destroying some nebulous future, but our present.

So I am going to postulate that our actual Debt to GDP is actually at about 146% of the GDP, not the official ~103%. And this is unfortunately a low estimate due to my lack of complete information. I do not, presently have numbers for cities and counties, just Fed and State. Now this is a pretty out there claim so I want to go over my methodology and reasoning for arriving at this number.

The GDP is an attempt to measure the entirety (read: spending) of the economy. In doing this, they also count in government spending at all levels, Federal, State, and local (city and county). This government spending accounts for a whopping 40% of the total GDP. But there are two glaring flaws in this number. The first is that it counts in borrowed money AKA deficit spending, or to put it in other terms, money that is spent via the government credit cards. This leads to a false view of the numbers because a government who wants to bump up their GDP could simply deficit spend until the GDP reaches whatever magic number they settle upon. As this is money that will need to be repaid in future years I feel that this must be removed from the GDP to maintain an accurate view.

The second flaw is that it counts State and Local spending as credits to the GDP but not their debt levels as debits to the debt. This again leads to a very inaccurate and (likely deliberately) misleading number. So for the adjusted debt to GDP numbers I provide I will be fixing this.

Using the most current numbers I have available (In billions):
Official GDP (OG): 15,100
Official Debt (OD): 15,700
Federal Deficit Spending (FDS): 1,327
State Deficit Spending (SDS): 133
State Held Debt (SHD): 4,238

Adj Debt as OD + SHD = 19,938
Adj GDP as OG – FDS – SDS = 13,640
Adj Debt to GDP = 146%

So using my methodology we come up with a number that, IMO, is a much more accurate snapshot of the actual situation. Feedback is welcome of course or if you have links to someone who aggregates the local data that would be awesome as well. I also want to make clear that I understand that a metric, if well defined and unchanging and understood by all parties, will work for discourse and the current numbers used for GDP and debt do that. But the above is an attempt to call out flaws and offer something better.

Some sources I have relied upon:
US Debt Clock

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