In this post I discussed a how a few measures people use for talking about stimulus and austerity. While I think there are definite risks for some of the things I pointed out, to a large degree it is my own preferences around clear exposition more than something that is actually "wrong".
One thing I didn't like was expressing things as a percent of GDP. That's fine for talking about a lot of things, but doesn't work as well when we're talking about the business cycle because both the denominator and the numerator are changing (and even worse - it's precisely the relationship between the two that we're usually interested in!). You can get some perverse results from that.
One thing I've never seen before - but should work pretty well - is measuring things like governmenet spending as a percent of potential GDP. That should no give you any perverse results and should be more easily interpreted.
Krugman has an example here.
The China Debt Zombie
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