"When the national debt reaches $15 trillion, it means that U.S. debt-to-GDP ratio will reach 99.7 percent of our debt and this is $47,900 for every living American."
Leonard Lance on Wednesday, November 16th, 2011 in a speech on the House floor
Leonard Lance says when national debt hits $15 trillion it will equal $47,900 for every living American
A balanced budget amendment can help restore order to the nation’s fiscal house, according to Rep. Leonard Lance.
A proposal to amend the U.S. Constitution to prohibit the federal government from running a budget deficit, unless three-fifths of Congress signed off on the spending, failed Friday in the House. On Wednesday, Lance (R-7th Dist.) spoke on the House floor to support the measure, opening his remarks with a rundown of the nation’s gross debt.
"As of November 14, 2011, the United States’ national debt is $14.973 trillion, according to the Department of the Treasury. With pending security auctions this month, it is inevitable that the national debt will reach the unprecedented level of $15 trillion in the coming weeks," Lance said. "When the national debt reaches $15 trillion, it means that U.S. debt-to-GDP (gross domestic product) ratio will reach 99.7 percent of our debt and this is $47,900 for every living American."
As a committee attempts to reach a deal to reduce the deficit before its deadline this week, PolitiFact New Jersey decided to check Lance’s claims about government debt.
Lance’s statistics differ slightly from what we found. Todd Mitchell, Lance’s chief of staff, said in an e-mail that "the discrepancy is simply the result of the fluctuation of debt and GDP stats."
The government’s total debt actually surpassed $15 trillion a day before Lance gave his speech, according to Treasury Department data.
The U.S. Bureau of Economic Analysis measures the gross domestic product, which is the value of all goods and services, or basically the size of the economy. In the third quarter of 2011, the most recent quarter for which data is available, the nation’s gross domestic product was nearly $15.2 trillion.
By those measures, the nation’s total debt represents nearly 99 percent of the nation’s economy.
Mitchell said he confirmed Lance’s statistics on a website called www.usdebtclock.org the day Lance gave his speech. The website, which updates constantly, put the ratio at 99.8 percent on Thursday.
The website doesn’t list a phone number and we got an automatic response to an email, but the difference appears to be that the clock has a gross domestic product, as of Thursday, that is more than $170 billion less than the figure listed by the Bureau of Economic Analysis.
We should note that there is another measure of government debt called "public debt," which some economists prefer. This calculation does not include debt the government holds itself, such as in the Social Security trust fund. By that measure, the debt to gross domestic product ratio is smaller, currently at about 67.8 percent.
Thomas Michl, a professor of economics at Colgate University in New York, argued that the debt held by the public is more meaningful because "It shows how much the government has been borrowing from the private sector."
"However, there are arguments that gross debt conveys some information (such as the future liabilities of the social security system), so no, you can't say that using gross debt is an obvious mistake," he said.
Now let’s look at Lance’s claim that the debt equals $47,900 for every living American. Mitchell said he also got those numbers on www.usdebtclock.org.
The amount listed on the website was at $47,990 on Thursday.
We also did our own math by dividing the gross debt by the number of U.S. residents, which the Census Bureau puts at more than 312 million. That’s about $48,000 in national debt per person.
In a speech supporting a balanced budget amendment, Lance said when the national debt hits $15 trillion, it will represent 99.7 percent of the nation’s economy and equal $47,900 for every living American.
The total national debt changes constantly. Lance’s statistics were based on a website called www.usdebtclock.org. Those numbers back Lance’s statement. Using federal data we calculated the statistics and reached similar results.
And both sets of numbers illustrate the same point: the nation’s debt is nearly the size of the nation’s economy.
We rate the statement True.
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