The Debt Lie

I’ve talked of spending patterns under different administrations prior to the election and several times since. The common theme is the guys hailing smaller government and lower spending keep spending more and growing government.

Two days ago Paul Krugman posted Naive Fiscal Cynicism where he again critiques the “math” or (my view lack of math) regarding austerity programs sweeping Europe, the IMF, and US. But down in the article he hits on what I call the debt lie, breaking out a nice chart of the gross debt as related to the GDP. Proof of the point we’ve explored here.

Gross Federal Debt relative to GDP

Interesting how closely it resembles some posts here like “Keep Kicking This Horse“.

Or how Kevin Phillips in American Theocracy points out how policymakers created this debt monster by repeatedly cutting taxes, but one sect wants to fix it solely by cutting the safety net. Hmm.

But here’s Krugman’s take in comparing how the debt has added up relative to the GDP since the depression. Interesting how this doesn’t correlate with what the politic is saying at all:

“Between World War II and 1980, every US president left the debt ratio lower when he left office than when he entered. Reagan/Bush I broke that pattern; Clinton brought it back; then came Bush II. And yes, debt is up under Obama, but a depressed economy in a liquidity trap is precisely when you’re supposed to do that.”

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