Campaign 2012: Is Huntsman’s 70 Percent Rule Right?

The U.S. government’s debt-to-GDP is ratio is 63 percent if you look at the amount of marketable debt that is publicly held. (If you throw in debt that one federal agency owes to another, the number is closer to 100 percent.) During last week’s CNN debate on national security, Jon Huntsman warned that once a country’s debt-to-GDP ratio climbs above 70 percent bad things happen:

I’d argue that 70 percent debt-to-GDP is a national security problem, because at some point, you just don’t grow any more when your debt becomes that. I mean, look at Japan. They’re in their third decade of lost growth. Look at Greece, look at Italy.

Bloomberg News has taken issue with Huntsman’s claim. After reviewing the numbers, Bloomberg reports that some countries with debt-to-GDP ratios exceeding Huntsman’s 70 percent threshold can still experience economic growth.

Germany, Europe’s largest economy, has debt equaling 83 percent of GDP and expanded 2.6 percent in the year to September. France, with 82 percent debt to GDP, grew 1.6 percent and Belgium, with 100 percent debt to GDP, expanded 1.8 percent. Economies in the U.K. and Austria are also expanding alongside debt that exceeds 70 percent of annual output.

Some of Huntsman’s rivals for the GOP presidential nomination no doubt wish that criticism of their foreign policy positions turned on whether they had identified the exact point at which a high debt-to-GDP ratio becomes a problem.

Last night, President Obama defended himself against criticisms of his Middle East policies generally and his handling of relations with Israel specifically by telling donors at a fundraiser:

I try not to pat myself too much on the back, but this administration has done more in terms of the security of the state of Israel than any previous administration. And that’s not just our opinion, that’s the opinion of the Israeli government. Whether it’s making sure that our intelligence cooperation is effective, to making sure that we’re  able to construct something like an Iron Dome so that we don’t have missiles raining down on Tel Aviv, we have been consistent in insisting that we don’t compromise when it comes to Israel’s security. And that’s not just something I say privately, that’s something that I said in the U.N. General Assembly. And that will continue.

I suspect that his GOP rivals will quickly take issue with that claim.

U.S. News and World Report has a helpful summary of each GOP presidential candidate’s view on STEM education—that is science, technology, engineering, and math education. Improving America’s STEM education is likely a key component in keeping the United States competitive in the global economy in the years to come.

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