The Congressional Budget Office has opined in the last few days that US Government spending is spiralling out of control.

There follow two telling extracts from the CBO late last week:

‘The relationship between government debt and real GDP growth is weak for debt/GDP ratios below a threshold of 90 percent of GDP. Above 90 percent, median growth rates fall by one percent, and average growth falls considerably more.’

‘When external debt reaches 60 percent of GDP, annual growth declines by about two percent; for higher levels, growth rates are roughly cut in half…’

Reuters comments that ‘the rush to implement liberal spending priorities today risks sacrificing growth and a rising standard of living tomorrow’.

Hard to argue with that; and there are lessons here for the UK as well.