The deficit for 2023 is $1.7 Trillion total. Do not conflate the deficit, how much expenses exceed revenue, with debt, the cumulative sum of deficits running back decades. We have only added $300 Billion to the deficit this year.
The US deficit spending this year is 6.6% of GDP. Last year the deficit spending of $1.4 Trillion was 5.5% of GDP. In other words, if there were no growth except that caused by government deficit spending, and that government spending was a wash - $1 of government spending for $1 of economic growth - you'd expect an annualized GDP growth of 1.1%.
Further, GDP growth fueled by deficit spending is still legit GDP growth, the same way that taking out a loan to remodel your home still creates a legitimate growth in your home's value. That remodeling may not have been the optimal investment, it might not even be a profitable investment, but it still is an investment.
If you project the first three quarters of GDP growth, the US should end the year with $27.6 Trillion of GDP. The annualized rate is 8.5% without adjusting for inflation. Inflation adjusted, the annual rate of growth is 3.75% in the first three quarters.
In that case, the $1.7 Trillion deficit is 6.1% of GDP, so actually a half-percent lower than your calculations.
If a government takes out a loan to build a $100 million bridge, is that bridge any different from a $100 million bridge that was funded by taking money out of the coffers?
A bridge will pay dividends for many years. Currently, the government is borrowing at 5.5% mainly to fund medicare that keeps 83 year olds alive and drawing on debt-funded social security for an extra 2 years.
Medicare and social security aren't bad things, but funding them with debt is pure consumption rather than a long term investment in US growth and productivity.
The 83 year olds aren't having dollar bills ground up and pumped into their bloodstream. That money is being paid to doctors, hospitals, medical manufacturers, etc. All of these entities are then going and spending those dollars on the inputs they need. Increasing hospital capacity is as legitimate a thing to spend money on as reducing traffic congestion.
More to the point though, if you spend $20k keeping grandma alive, is she any less alive because that $20k was loaned versus pulled out of her mattress?
GDP is not a measure of how optimally money is being spent, it's just a measure of how much economic activity is going on.
These two are often lumped together, though are quite different. SS deficit can be fixed with slight increase of retirement age and slight payout reduction and slight contribution increase. Medical spend is completely broken and unfixable without going after the medical cartels.
The fact that it can be fixed doesn't matter if its currently not fixed. Those are the two biggest budget items, so it's what the government is spending the most money on.
Technology developed that goes into keeping 83 year olds alive actually does have second order effects on productivity and being able to work for longer.
if GDP growth fueled by deficit spending is still legit GDP growth, then couldn't we easily have double, triple, or 100x growth just by more deficit spending? Why limit it to single-digit percentages? Let's really get things cooking.
Yeah, you can 100x growth, you just need to find someone to give you a $170 trillion loan, and then service the interest. That's a bit tough when world GDP is $95 trillion.
The US deficit spending this year is 6.6% of GDP. Last year the deficit spending of $1.4 Trillion was 5.5% of GDP. In other words, if there were no growth except that caused by government deficit spending, and that government spending was a wash - $1 of government spending for $1 of economic growth - you'd expect an annualized GDP growth of 1.1%.
Further, GDP growth fueled by deficit spending is still legit GDP growth, the same way that taking out a loan to remodel your home still creates a legitimate growth in your home's value. That remodeling may not have been the optimal investment, it might not even be a profitable investment, but it still is an investment.