At first impression if a nation currently had a debt of 80% of gdp, and ran a budget deficit of 12% of gdp for 10 years, one would assume at the end of the 10 years, the debt would be 200% of gdp. But actually that is not what happens.
Each year productivity pushes forward about 2%, population by 1% and the national target rate of inflation in the US is 2%. This means the nominal size of the economy grows by 5% per year. And this causes debt taken out in prior years to become much smaller in relative terms.
So with a 5% nominal increase in the size of the economy, and running a deficit of 12% of gdp for 10 years, starting at a base of 80% of gdp.. At the end of the 10 years the debt is 149% of gdp, not the 200% of gdp expected.
149% of gdp is not out of hand, in the new era we are in. Japan, which was the first nation into this era, already has a national debt of 200% of gdp. And looks stable. It would take the USA 20 years of running a budget deficit of 12% of gdp to get to 200% of gdp.
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