From what I've seen in the past few years the graph looks a little better when inflation is taken into account, but not so much that the shock value is taken away.
Yeah, sorry. I mainly did it as an exercise to find and suck down public data as a result of some bullshitting with Ian.
I'm going to guess that even if it's inflation adjusted, it's still exponential growth. I'd use inflation adjusted, if it were easier to find, but historical debt outstanding is what I found first.
Even then, it was interesting seeing how it matched up with the senate majority and how it compared to the past.
I find myself wanting to see these graphs when I read some article in the papers, or someone goes on ranting about economics or politics. Does anyone else have these inclinations?
Plotting as a percentage of GDP can also be misleading, eg US military spending is 4% of GDP but 30% of tax revenue according to wikipedia. They also discuss debt expenditures getting too high on that page.
From the article: "The first surprising thing was how fast the national debt has grown in the last 30 years."
The sharp incline coincides with Nixon's 1971 end of the Bretton Woods system. Domestically the dollar has been off the gold standard since 1932, but up until 1971 foreign banks could still redeem US dollars for gold. Since gold is a limited commodity there's a limit on how much we can spend or borrow. Once that tie was broken, we were free to run unlimited debts.
The vast majority of the unfunded liabilities of the government (most Social Security obligations, Medicare, pensions, various new bailout programs) aren't captured in the official national debt data at all...total federal obligations under business accounting standards amounted to $65.5 trillion in 2008.
"Unfunded liabilities" are an incredibly terrible and misleading measure of debt; it's like saying I owe two million dollars because of the money I'm going to have to pay over the rest of my life for food and housing. Obviously, I'm going to have to pay it one way or another--that doesn't mean you can count it as part of my "debt"!
Your argument makes perfect sense for people, no sense for corporations ("it's like saying GM owes X billion dollars because of the money they're going to have to pay in retirement benefits"), and some sense for governments.
> Unfunded liabilities" are an incredibly terrible and misleading measure of debt; it's like saying I owe two million dollars because of the money I'm going to have to pay over the rest of my life for food and housing.
Except that it's not. The money that you'll pay for food in the future comes from money that you'll earn in the future. Note that both are "the future". If you stop earning, you're only on the hook for future eating.
We've promised (via SS) to pay people money in the future based on what they've already paid, that is, in the past. If we stop taking in money, we still owe.
The food comparison would be that you owe money for food that you've consumed in the past and you're plannning to pay for it with future earnings. If you're eating in the future while you're earning, said future earnings will have a shortfall or will have to cover both future and past eating.
Unless you're really careful, and we haven't been, at some point, the "future earnings" will exceed what is owed for past consumption.
In the case of SS, workers will see see 20-30% of their income being given to old people. They're going to wonder whether their children will pay enough to them to make up for that 20-30%. If they decide that their children won't, they'll figure out that keeping said 20-30% for themselves is their best move. At that point, where does the money to pay old people for their "contributions" come from?
I'd say that it is less than "terrifying" to plot the national debt on a log scale. Most numbers in economics (and in nature) vary in an exponential manner. Consider, for example, inflation, interest rates, and population growth. Nature deals in ratios; it is only human afterthought that adds units to measurements.
One incidental result of the fact that numbers tend to vary exponentially is that the first digit of a measured number is most likely 1 and least likely 9. See http://en.wikipedia.org/wiki/Benford%27s_law .
Most are actually sigmoidal. Exponential growth is unbounded, but most growth functions in nature have some upper bound set by the environment.
Debt's a curious one though. It grows exponentially, but it tends to "reset" at times through various currency crises, at which point the currency is replaced entirely.
How nice. There's two paragraphs of which the author says it's about programming, but in reality it's about how hard it is to fact check political statements. The rest of the article is politics pure and simple. If you don't believe me, you need only look at the comments here.
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[ 4.6 ms ] story [ 63.1 ms ] threadI'm going to guess that even if it's inflation adjusted, it's still exponential growth. I'd use inflation adjusted, if it were easier to find, but historical debt outstanding is what I found first.
Even then, it was interesting seeing how it matched up with the senate majority and how it compared to the past.
I find myself wanting to see these graphs when I read some article in the papers, or someone goes on ranting about economics or politics. Does anyone else have these inclinations?
edit: someone already linked it
Here is a link to CPI since 1913: ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt
A quick modification would make the data more powerful.
And don't forget Social Security, Medicaire, gov't pension liabilities, etc - they are important parts of the numerator ..
Plotting as a percentage of GDP can also be misleading, eg US military spending is 4% of GDP but 30% of tax revenue according to wikipedia. They also discuss debt expenditures getting too high on that page.
The sharp incline coincides with Nixon's 1971 end of the Bretton Woods system. Domestically the dollar has been off the gold standard since 1932, but up until 1971 foreign banks could still redeem US dollars for gold. Since gold is a limited commodity there's a limit on how much we can spend or borrow. Once that tie was broken, we were free to run unlimited debts.
No federal debt, but it resulted in the Panic of 1837!
If you really want to geek out there is a lot here: http://fms.treas.gov/fr/08frusg/08frusg.pdf
Except that it's not. The money that you'll pay for food in the future comes from money that you'll earn in the future. Note that both are "the future". If you stop earning, you're only on the hook for future eating.
We've promised (via SS) to pay people money in the future based on what they've already paid, that is, in the past. If we stop taking in money, we still owe.
The food comparison would be that you owe money for food that you've consumed in the past and you're plannning to pay for it with future earnings. If you're eating in the future while you're earning, said future earnings will have a shortfall or will have to cover both future and past eating.
Unless you're really careful, and we haven't been, at some point, the "future earnings" will exceed what is owed for past consumption.
In the case of SS, workers will see see 20-30% of their income being given to old people. They're going to wonder whether their children will pay enough to them to make up for that 20-30%. If they decide that their children won't, they'll figure out that keeping said 20-30% for themselves is their best move. At that point, where does the money to pay old people for their "contributions" come from?
One incidental result of the fact that numbers tend to vary exponentially is that the first digit of a measured number is most likely 1 and least likely 9. See http://en.wikipedia.org/wiki/Benford%27s_law .
Debt's a curious one though. It grows exponentially, but it tends to "reset" at times through various currency crises, at which point the currency is replaced entirely.
Flagged.
Well, another site down the drain :/
For an insightful look at the US national debt.