Tags: Judd Gregg | Debt | GDP | Economy

Former GOP Senator Judd Gregg to Moneynews: US Debt-to-GDP Ratio Is Exploding

By Glenn J. Kalinoski and David Nelson   |   Monday, 10 Jun 2013 07:54 AM

The debt-to-GDP ratio in the U.S. is moving to dangerous levels seen in Europe, said former Republican Senator Judd Gregg.

"We know that once a country's cost is at 60 percent debt-to-GDP level they're in trouble," he told Newsmax TV in an exclusive interview.

"Historically our debt-to-GDP level is 35 percent up until three, four years ago. Then it's bounced," said the veteran politician, who also was governor of New Hampshire and a member of the U.S. House of Representatives.

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"Now it's up to around 70 percent. It's headed toward over 100 percent. You look at Greece, you look at Spain, you look at Italy, you look at France. Their debt-to-GDP ratios exceed 100 percent and they're essentially in bankruptcy or headed in that direction. Unfortunately, our debt-to-GDP ratio is heading in that direction, too."

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.

The Republican discussed his service on the Simpson-Bowles Commission, which he said came to the conclusion that "we could stabilize [at] 70 percent and we'd be doing a good job." Gregg said that would require a reduction in spending by, "at that time, that was two years ago," $4 trillion over 10 years.

"Now we need to reduce spending by approximately $5 trillion over 10 years in order to hit that same number." Gregg said.

Putting politics before people was another topic Gregg covered when discussing his time on Capitol Hill.

"There's a natural tendency in Congress to want to get re-elected first and not worry too much about anything else," he said. "It's a difficult issue because these are complex questions. They involve very important issues that affect all Americans — Medicare, Social Security, tax reform," he said.

"When you step on to that ground, you're stepping on to a very volatile area of politics. But at its core is a question of whether or not we have a solid country, and if you don't have a solid country, then you're not doing your job as a member of government."

Gregg also discussed his recent appointment as CEO of the Securities Industry and Financial Markets Association.

"One of the great advantages that America's always had is we've had a very strong capital market," he said.

"If you … want to take a risk, put sweat equity into your activities, and, as a result, are successful and start to create jobs, you're probably going to have [to] find some money to support you even doing that," he said

"And what America has is a capital market which allows you to get those types of funds, either through borrowing or through direct capital investment. It's a very integrated system and it basically has worked fairly well making us the most prosperous country in the world, in history. It's a critical element of maintaining our prosperity on Main Street."

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.

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The debt-to-GDP ratio in the U.S. is moving to dangerous levels seen in Europe, said former Republican Senator Judd Gregg.
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2013-54-10
 

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