So What Are Our Congressmen Fighting About?
October 6 2013
I have been listening and this is what I heard in a chart.
My eye tells me we are in trouble, real trouble and our Federal debt management (red line) is going to cause incredible problems soon.
(Total Federal Debt / GDP) * 100 / Total US Population
US GDP in dollars
The percentage of US Government Debt as a percent of nominal gross national product per capita compared to nominal gross domestic product.
Note that both Reagan- Bush 1 out of the 1982 and Obama out of the 2008 recessions increased Federal debt five fold per capita. Regardless of party, economic circumstances cause Presidents and their friendly or unfriendly Congresses to react, it seems wildly.
(Click to go to St Louis Fed FRED graph editor)
Looks really bad in this presentation -- our debt management (the red line) is out of control relative to GDP growth (the blue line). Here is what I am reading, Obamacare, we assume, will force the Federal Government to borrow more and will make it much worse! I will sacrifice more of my independence as it gets worse for all of us.
That is what I divined from partisan rhetoric.
But, we are visually (and rhetorically) comparing percentages to absolute values on different scales, apples to oranges.
Same data comparing Federal debt grow and GDP growth both per capita, apples to apples:
Federal debt as a percentage of total gross national product for each citizen (red line)
Total gross national product for each citizen (blue line)
Not adjusted for inflation
(Click to go
to St Louis Fed FRED graph editor)
Not so bad.
The citizen's value (percentage of gross national product per citizen) has increased from 1965 five fold while the Federal debt/GDP per citizen has stayed relative to GDP growth about constant. We did great!
Our Presidents and our Congresses over 48 years did what they needed to do, very well.
Well, maybe ego ... not matured by learning from their mistakes and the costs.
So after a period of tremendous economic growth per person, we are going to intentionally damage our economic power by defaulting as a nation, driving up our interest costs and going where we have never gone. Why?
And if we can drive our medical costs per capita down, we can drop our prices and continue to grow and become more competitive. Invest to become more efficient (increase the slope of the blue line).
Check your foot for the bullet hole! That is the cost for the current generation (better cohort - sounds more menacing) to learn how to govern, maybe at a great loss to us all. But I am aging out ... need to put a bandage on my foot. Where'd you go Joe Demaggio?