Comments (14)

• Steve Hogan

  Did you notice how the slope of the debt line never goes down during recessions? Evidently there is no such thing as belt-tightening in the public sector.

  Published: June 5, 2007 9:51 AM

• jeffrey

  Looking at the big picture of all this information, the US economy looks like a house of cards to me. Imagine what would happen if the US didn't have international markets to absorb its debt!

  Published: June 5, 2007 10:01 AM

• Pode

  I wonder, does expressing the debt in terms of ounces of gold instead of dollars make the chart more or less scary?

  Published: June 5, 2007 10:28 AM

• David C

  Warning:The debt numbers you get from the Federal Government are a lie. 8 trillion! I could only wish federal debt was that low. They don't include social security bonds, medicade, medicare, and pension obligations in that 8 trillion. A more accurate breakout is here:

  http://mwhodges.home.att.net/debt_b.htm#summary

  By looking at the more honest picture, it then becomes clear that the US economy had about 30 tillion in private sector obligations, plus 10 trillion in federal obligations, plus 50 trillion in unfunded liabilities obligations. = about $800000 per family increasing at about 30K per year = we are bankrupt even by Enron standards.

  Published: June 5, 2007 10:39 AM

• Dr. Mark Thornton

  Boy, that really is gross!

  Published: June 5, 2007 10:43 AM

• Sag

  I wonder if it means anything that the graph gets really steep just as the recessions get spaced out. Inflationary boom(s)? Wow...

  Published: June 5, 2007 11:31 AM

• EconAndre

  To play devil's advocate, some economists argue that non-sovereign debt obligations such as medicare, social security, etc. don't carry as much "weight" as sovereign debt (bills, bonds, etc.)because the US government could simply change the rules and decide to not pay them without defaulting.

  This kind of "privilege" (breaking promises) doesn't apply to private agents without bad consequences. Try this argument with your creditors or with anyone else to whom you made a promise.

  Published: June 5, 2007 11:38 AM

• happlee

  Wow, it's the real hockey stick! Where's Gore?
  http://en.wikipedia.org/wiki/Hockey_Stick_graph

  Published: June 5, 2007 12:20 PM

• Brad

  Thanks David C, I've been beating this exact drum in this exact way for 4-5 years now, to little avail. It's refreshing to see someone else lay out the bottom line.

  While the site is wonderful, I can't help but wonder if, but its nature, it many not be convincing to the unintiated. I would include this-

  http://www.gao.gov/financial/fy2005/05frusg.pdf

  With this as an excerpted link from Comptroller Walker-

  http://www.gao.gov/financial/fy2005/05gao1.pdf

  excerpting this-

  The federal
  government’s gross debt3 in the consolidated financial statements was about $8 trillion as
  of September 30, 2005. This number excludes such items as the gap between the present
  value of future promised and funded Social Security and Medicare benefits, veterans’
  health care, and a range of other liabilities (e.g., federal employee and veteran benefits
  payable), commitments, and contingencies that the federal government has pledged to
  support. Including these items, the federal government’s fiscal exposures now total more
  than $46 trillion, up from about $20 trillion in 2000. This translates into a burden of about
  $156,000 per American or approximately $375,000 per full-time worker, up from
  $72,000 and $165,000 respectively, in 2000. These amounts do not include future costs
  resulting from Hurricane Katrina or the conflicts in Iraq and Afghanistan. Continuing on
  this unsustainable path will gradually erode, if not suddenly damage, our economy, our
  standard of living, and ultimately our national security.

  There is no refuting the content or the source, as it comes directly from the Treasury. I've shut up many a combatant with it, though unfortunately many still always find a way to fall back on "well, we gotta something" to mean we still have to do "the somethings" that lead to such nonsensical financials as the ones presented. Sometimes even if crack the nut, they'll still think whatever they want even in the face of overwhelming evidence to the contrary.

  
  Also, on another site I've argued with someone over the definition to totalitarianism, and that it must have some inclusion gulags and concentration camps to prove totalitarian thuggery, versus just simply a grossly bloated leviathan. I think this one diagram is worth a thousand words toward the latter conception.

  Published: June 5, 2007 1:05 PM

• Matt

  How about a log scale?

  Published: June 5, 2007 1:28 PM

• Dom

  Jeffrey

  the Austrian Study Guide link at the bottom end of the Markets page is broken ...

  
  

  Published: June 5, 2007 3:14 PM

• jeffrey

  Thanks. Fixed.

  Published: June 5, 2007 3:26 PM

• andy

  Matt, log scale is appropriate for inflation, I do not see a reason for log scale on Debt? (it should be adjusted for price level changes though)

  Published: June 6, 2007 7:48 AM

• Mathieu Bédard

  First thing that comes to mind is that Republicans are the true champions of government spending..

  Published: June 6, 2007 8:39 AM