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Federal debt held by the public was 40% of gross domestic product in 2008. It is projected to exceed 70% this year.

Welcome to VoteFacts. With the selection of Rep. Paul Ryan as VP, there will be a move to push issues like debt to the forefront of the presidential campaign. We've always got a an eye on such issues. So, we're looking into a statement from the Wall Street Journal to help us focus on facts that relate to public debt. Their statement goes like this, "Federal debt held by the public was 40.5% of gross domestic product in 2008. It's now 74.2% and rising."

First let's take a look at debt held by the public in 2008:

What we know from the 2012 Office of Management and Budget (OMB) report is that debt held by the public was 40.3% of GDP at the end of fiscal year 2008. The WSJ article is really close to the OMB number, and maybe they took their numbers from a different government report, but we did not find that report (the Congressional Budget Office puts it at a flat 40% in 2008).

So let's move on to the next part. Is the debt held by the public now at 74.2% of GDP and rising? For the "now" part, we can look at the numbers and calculate that out for ourselves. Debt held by the public, as opposed to total public debt outstanding, is what the CBO uses to calculate this number and clearly what was used to get the number found in the WSJ report.

• Debt held by the public currently stands at $11.121 trillion, according to and their regularly updated debt to the penny website. Total public debt outstanding stands at nearly $16 trillion dollars.

• Meanwhile, the Bureau of Economic Analysis (BEA) reports that gross domestic product was calculated in the second quarter of 2012 to be $15.595 trillion.

Divide 11.121 by 15.595 and you get 71%.

As for future projections -- Here is what the CBO said in their most recent report:

• By the end of this year, the Congressional Budget Office (CBO) projects, federal debt will exceed 70 percent of GDP - the highest percentage since shortly after World War II. CBO, Page 1

Below is a figure from the CBO to get a good look at debt held by the public historically. Diehard VoteFacts readers (you know who you are) probably already know from the Fast Facts section how the CBO reports work, but for those of you who have not yet read through those Fast Facts, the CBO uses two different budget scenarios, explained briefly here:

The first is their baseline scenario, which assumes that current laws stay as they are (for example, tax rates that are currently scheduled to expire will expire for everyone, the Medicare physician rates drop by 29%, the Budget Control Act spending cuts of over $1 trillion actually happen, etc.).

The second is their alternative scenario, which looks at things as if current laws change, for example, those tax rates do not expire as they are scheduled, the Medicare reductions do not happen, and the Budget Control Act cuts in spending do not happen, etc.

This figure represents debt held by the public as a percentage of GDP historically as well as the CBO's baseline and alternative fiscal scenarios in their "extended" year forecasts.

So now that you have verified and gathered information on today's Fact or Fiction question, what's your answer? Go ahead, cast your vote.


OMB, Page 140

OMB Report URL -

CBO Figure, Page 1


The Wall Street Journal is a registered trademark of WSJ Inc., Whippany, NJ

VoteFacts Original Post Date:  August 13, 2012

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Was federal debt held by the public 40% of gross domestic product in 2008 and is it projected to exceed 70% this year?
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Voting Key

Fact = 100% - 92% True
Mostly Fact = 91% - 75% True
Slightly Fact = 74% - 60% True
Split = 59% - 50% True
Slightly Fiction = 49% - 30% True
Mostly Fiction = 29% - 10% True
Fiction = 9% - 0% True