Screw Up the Budget? Yes We Can!

John Taylor writing for the Financial Times had this to say about our government spending practices. 

Best line? 

Ask and your shall receive:

The debt was 41 per cent of GDP at the end of 1988, President Ronald Reagan’s last year in office, the same as at the end of 2008, President George W. Bush’s last year in office. If one thinks policies from Reagan to Bush were mistakes does it make any sense to double down on those mistakes, as with the 80 per cent debt-to-GDP level projected when Mr Obama leaves office?

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John
Great quote. It is a shame that the facts don't bear him out. At the end of G. W. Bush's term, the national debt was $9,188,640,287,930.39 according to the US Treasury, and the GDP was $14,264,600,000,000.0 according to the Bureau of Economic Analysis, which makes the national debt 64% of the GDP on January 20, 2008. And it is worth noting that during the past eight years, the national debt has roughly doubled whereas it is projected to increase by just another 50% over the next six years.

John

PS - good to see you back, dox^dox!
dox^2
My guess is that there are a million ways to slice these numbers depending on what these "economists" are looking at or what they feel are relevant calculations.

My guess is that they can probably correlate the number of Somalia pirates to the increasing debt load of Western nations.

Overall though, increasing the debt is probably not a good idea in the long run.
John

My guess is that there are a million ways to slice these numbers depending on what these "economists" are looking at or what they feel are relevant calculations.

Agreed. The national debt is known to the penny, so the wiggle room comes in defining "GDP". But, no matter how you slice it, the numbers don't bear Taylor out.

My guess is that they can probably correlate the number of Somalia pirates to the increasing debt load of Western nations.

Would you settle for the number of pirates to global warming? As any good scientist knows (and even a few economists), correlation does not prove causation. Instead, it should be used in the same way that a DNA test is -the result is only truly reliable if the two don't match.

Overall though, increasing the debt is probably not a good idea in the long run.

No argument from me on that point; I've been for lowering the debt for decades now. Heck, I voted against Reagan the second time because he had increased the debt by so much!

John

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