Glenn's Junk Chest

An assortment of Glenn's writings, photography, gaming resources, flash movies, and other creative output.

Friday, November 19, 2004

Politics: The National Debt

The country will now reap what its electorate has sown. People have probably been curious what would come of Bush's famous post-election announcement that he planned to "spend political capital". Well, be curious no longer, what he meant was that he was ready to spend our children's actual capital.

That's right, it's time for us to let the shameful national debt go up again. The Republican-controlled Congress just passed the required bill. This CNN article lays it out in detail, and has some fairly matter-of-fact analysis of what's going on. This is the vote that the Republicans delayed to have fall after the election, so that the Democrats could not use it against the incumbent. The vote split almost entirely along party lines.

Of course, even if Kerry had won the election, the debt cap would still need to be raised today, because it represents the mismanagement of the past year or two, and he wouldn't even be President yet. But, if history is any indication, four more years of Bush mean that the debt will go up another trillion or three.

But wait, you say, the debt has gone up every year for decades, the Democrats are no better than the Republicans! While it is true the debt has gone up, this is misleading. The problem is, our economy is huge, the debt has a lot of upward momentum, and people who are the benificiaries of it put out a lot of pressure to keep the money coming. If you look at this graph you can see that after 6 or so years of Clinton, the debt was starting to level off. (You can also see the immediate impact of W. Bush's 1st term, as the levelling off ceases immediately and the debt begins skyrocketing again.)

However, the Clinton years are still yet better than this suggests, because once inflation is taken into account, it's clear that the debt was starting to go down. (Scroll down to the blue graph). Then take a look at this graph, which compares the debt to the Gross Domestic Product.

As many people have despaired of late, this is what we get from the party that touts fiscal responsibility? I shake my head in fear and wonder, and seek solace in Schoolhouse Rock.


At 7:45 AM, Anonymous Anonymous said...

Not to detract from your central thesis, Glenn, but I would be a bit careful with the graph you pointed out. First, it looks like that graph uses nominal dollars, not inflation-adjusted dollars, which will make the recent debt levels look much larger by comparison. (For example, gas prices are at a nominal all-time high, but in real terms, the peak was ca. 1981.)

Second, and more imporantly, my undrestanding is that one normally wants to compare a nation's debt to the size of its GDP (on a percentage basis). Not that the numbers will be all that much better, but I believe it's more helpful.

Economically yours,
Dr John

At 8:23 AM, Blogger Glenn said...

I believe you may have stopped reading my post too soon, my friend. I link to an inflation-adjusted graph and a graph comparing to GDP in the paragraph after the one you mention.


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