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Comments (32)
Sriram Gopalan
Is this inflation adjusted?
Published: February 8, 2008 4:59 PM
jeffrey
No, not adjusted but a quick check shows that if spending at had stayed constant in real terms from 1980, it should be $500 b. Oh by the way, the Cold War ended.
Published: February 8, 2008 5:45 PM
Dennis
I would like to see the graphs if one plots federal spending on education, housing, or health care. I would not be surprised if the lines are just as steep or steeper. Leviathan manifests itself in numerous ways.
Published: February 8, 2008 6:27 PM
Jaq Phule
I find it highly interesting that the rate of increase was relatively constant (insane) during the Carter/Reagan years, and flat-ish during Bush(I)/Clinton. Who says we can't be bipartisan?
You can almost read the headlines as you see the chart. The ONLY dips in the graph happen at the end of Korea and the "end" of the Cold War. There's a leap around 1964, just in time for the Gulf of Tonkin. Anybody have any explanation -- the phony one, since we all know the real reasons -- why spending leapt up *after* Vietnam? And what all was Jimmy Carter really up to?
Looks like Eisenhower managed to cut spending during a recession. Somebody unearth the "I Like Ike" buttons, and maybe Ike himself. We have a new libertarian write-in VP candidate for November.
The big pointy phallic spike on the end raises some interesting questions on what our Maximum Shrubbery feels he needs to compensate for...
This graph just goes to show: If you clap your hands and believe in fairies hard enough, we can all Whip Inflation Now.
Or not.
Published: February 8, 2008 7:33 PM
Marty
In fiscal year 2005, the U.S. Air Force alone burned 3.2 billion gallons of jet fuel, most of it in the stratosphere. The untold gallons of jet fuel dumped in the world's oceans by Navy jets just before landing on air craft carriers is unknown. Global warming? C'mon Al Gore, let's at least talk about the biggest carbon footprint on this Earth before you point your fingers at us.
Oh, and by the way, the contract for bullets in '05 was 1.2 billion. You'd think that'd be enough, but in '06 the contract for bullets jumped to 1.4 billion. Do the math: 30 some thousand per Iraqi after subtracting half for training and practice.
Published: February 8, 2008 7:36 PM
Omar
"Realists," of international relations believe that America can only be safe if it maintains global hegemony manifested in extreme levels of defense spending to deter great powers from ever attacking or attempting to reach our level to attack us.
I think its bologna but oh well...
Published: February 8, 2008 8:19 PM
Eliza
It strikes me that if you want to deplore the growth of US defense spending but limit your case to the presentation of a single graph, then you're under an obligation to make sure that graph makes your case fairly and correctly.
So it seems odd to choose nominal data to describe the trend in real defense spending over the last 60 years. The dominant phenomenon we see looking at this graph is inflation, not defense spending increases. Adjusted for inflation the data look totally different: (http://www.heritage.org/research/features/budgetchartbook/charts_s/s6.cfm (1967-2007)). They form five major peaks, each with its corresponding trough--you can read our history on their slopes. The first is World War II, the second is Korea, the third is Vietnam, the fourth is the Reagan defense buildup, and the fifth is the Bush incontinence.
In 2006 dollars, the 1945 World War II defense spending peaked at $650 billion then fell to $150 billion, 76% in four years. In 1952 spending for Korea hit $530 billion, up 72% from the 1949 low. That sorted out fairly quickly and by 1955 the budget was down 43% to $301 billion in spite of all the Cold War toy-making. Then there was 1968, when the Pentagon was back up to $460 billion, but that slid to $310 billion by 1975--a rise and fall of about 32 percent over 13 and 7 years respectively. Next was Reagan and 1984. Spending rose to $500 billion then was back to $320 billion by 1997. What Bush is asking for in his 2009 budget--$515 billion plus a separate $70 billion for the wars--would be an increase of 35% since 2001 and the highest level of spending we’ve had since World War II, beating out the Korea budget.
Really it’s quite true; we are spending an awful lot of money on defense right now, almost as much as we ever have. So it should be easy to make the case for snapping our handbags shut. But it seems unsporting to use these data to do that. Just look at the spurious result you get when you compare spending for 2009 with 1945. The 2009 budget appears to be many times larger than 1945's when in fact it is smaller.
Besides, inflation these last decades has been so pestilential that dystopian military spending starts to look benign next to it. Best to separate the issues and take them on in isolation, no?
Published: February 9, 2008 6:28 AM
George Gaskell
Best to separate the issues and take them on in isolation, no?
No.
That's the unique contribution of economic thinking -- to show us how everything is connected. Events in an economy are not isolated. The economy is not merely a complex system -- it is a complex adaptive system. Actions have a systemic, ecological effect, particularly actions on a scale as large as the U.S. military budget.
This site is dedicated in large part to the importance of hard money, so you will probably get no real objection here to your point about the inflation that underlies this graph.
But one might also argue that one of the government's primary reasons for engaging in massive inflation over the past 80 or 90 years is to facilitate the military spending reflected in this graph. Therefore, the inflation and the military spending cannot be separated without losing this often-overlooked nexus.
Published: February 9, 2008 9:09 AM
lester
everything was pretty normal till scoop jackson and co jacked up aid to israel and funding for missile defense in the 70's. without that we'd be at 200 billion at the most now. not a big drain
Published: February 9, 2008 9:23 AM
fundamentalistn
Eliza : "Adjusted for inflation the data look totally different..."
Thanks for the link! The deflated data is very interesting and you provided an excellent analysis. I might add that as a percent of GDP, military spending is very low, too. In addition, the inflation indexes provided by the government understate inflation by a large degree because they include just the effect on consumer/producer goods, not the effect on asset prices. The price of gold is the best deflator and I would imagine it would make military spending look even smaller today.
George: "But one might also argue that one of the government's primary reasons for engaging in massive inflation over the past 80 or 90 years is to facilitate the military spending reflected in this graph."
That's quite a stretch in logic. I doubt anyone can prove the motivations of other people, but wouldn't social spending be more of a motivator, especialling since it's a larger part of the budget? Marxists like inflation because Marx thought it would destroy the common man's attachment to property and undermine Christian morals. Keynes liked it because he thought it was harmless and the lower interest rates would create a utopia of abundance.
I think the real lesson of federal spending is to keep Congress and the White House at odds with each by making sure Democrats hold one and Republicans the other. In other words, always vote for gridlock. As Mises wrote in his later years, the public is so attached to their foolish economic ideas that only a major crisis will change their minds. Once the crisis hits, we may have a shot at promoting liberty.
Published: February 9, 2008 11:12 AM
jeffrey
That's a good point about inflation taking place precisely to fund the warfare state. Also, if you take seriously the whole Cold War rationale of stopping the grave threat of communion, spending should be far far far lower than it was in 1965 because communism vanish. Fortunately for the Mil-indust-complex, another enemy popped up just in time to prevent the US from spending less than the rest of the world combined on the military.
Published: February 9, 2008 11:56 AM
George Gaskell
That's quite a stretch in logic. I doubt anyone can prove the motivations of other people, but wouldn't social spending be more of a motivator, especialling since it's a larger part of the budget?
Facilitating all forms of spending is the motivation. Dollars are fungible. If you make it easy to spend money on one thing, whatever it is, then you necessarily are also freeing up money to spend on every other thing.
Is it really such a stretch to say that politicians, who exist to rob people to funnel government money to their constituents (i.e., their collaborators), are in favor of creating a monetary system that makes that government's deficit spending easier?
If one can accept the proposition that politicians are opposed to hard money because it would staunch the flow of cash into their hands, then one must also conclude that their motivation for inflationary loose money is the desire to facilitate such spending. It's two ways of saying the same thing.
Published: February 9, 2008 2:41 PM
Eliza
I see that I haven't been clear, George. Mea culpa.
It is axiomatic that "[e]vents in an economy are not isolated." But when you wish to study a particular trend, in this case the rise in military spending, you must isolate it from other variables. If you don't, as in this case, you expose yourself to contamination of the data on a massive scale.
You should be able to see that the curve on the graph above fails utterly to describe the real trend in military spending. Inflation causes so much distortion that the unadjusted data have no real meaning.
This prompts the question: Why plot them at all? I can only imagine some fellow calculated that the nominal data made his case better than the real data; and hey, any weapon to hand.
Published: February 9, 2008 5:29 PM
Eliza
Thank you, fundamentalist. And you're right about military spending as a percentage of GDP. Here's the link on that: http://www.heritage.org/research/features/budgetchartbook/charts_s/s7.cfm (1965-2007).
It's shocking that we're still 1.5% of GDP below the 45-year historical average.
Published: February 9, 2008 5:39 PM
George Gaskell
It is axiomatic that "[e]vents in an economy are not isolated."
I agree, but I make the point anyway because a great deal of what passes for economics these days seems to ignore this basic axiom.
But when you wish to study a particular trend, in this case the rise in military spending, you must isolate it from other variables. If you don't, as in this case, you expose yourself to contamination of the data on a massive scale.
You presume that "the rise in military spending" is the one and only trend that can or should be studied. If, however (as I attempted to indicate in my original comment) that one's focus is broader, then the chart is certainly useful, one might say illuminating.
In this case, one way of describing that broader focus might be "the symbiotic relationship between federal spending and inflationary easy credit promoted by the Federal Reserve."
Another way of phrasing this focus might be "how the Federal Reserve exists to enable the welfare-warfare state."
You might recognize these as general themes of Austrian economics.
Simply because the chart doesn't serve your particular agenda doesn't mean that the information it conveys is "contaminated."
Published: February 9, 2008 9:26 PM
Dan Mahoney
George Gaskell's comments are, frankly, bizaare.
Even allowing for healthy Austrian skepticism over
terms like "GDP", what is so hard to understand about
the point that data in real and nominal terms can tell
very different stories? Does he really think it takes
a hard-core praxeologist to grasp this? At any rate,
does he think praxeological concerns were behind
the motivation to post this chart in the first place? His
comment about serving agendas is rather rich.
Just to clarify, no one is more opposed to US foreign
policy and militarism than I am. I am no Republican
shill, but this chart simply does not make the point it is
intended to, and it opens the Mises Institute to
charges of dishonesty.
Published: February 10, 2008 8:55 AM
Eliza
You’re one tough nut to crack, George, but I’m going to have one last go at you.
Your conjecture is that "one of the government's primary reasons for engaging in massive inflation over the past 80 or 90 years is to facilitate the military spending reflected in this graph," so let’s start there. Now, a graph can’t prove intent, but it can suggest it by showing a correlation between the two relevant variables--inflation and real military spending. In other words, when you plot the two variables and overlay them, during the war years they should more or less show a tendency to rise and fall together.
For example, if you start with this graph of inflation from 1945-2005 [http://www.policepay.net/pdf/usecon.pdf (pg. 4)], then overlay the data from this graph of real military spending from 1945-2005 [http://www.d-n-i.net/charts_data/evolution_of_the_fy_2004_supplemental.htm], you’ll be in a position to start drawing some conclusions. The layout would be similar to this wonderfully trenchant effort, which compares the CPI and rate of inflation over the years 1925-2005 [http://www.zealllc.com/2003/infdef2.htm].
As it happens, over time there is a decent correlation between increases in military spending and spiking inflation--although that seems to break down a bit after 1971 (coincidence?), and we certainly aren’t seeing it right now. But note that to see all this it is necessary to isolate the two variables and plot them separately. None of the apparent correlation is, as you have suggested, reflected in the graph above.
Now, why is that? Look at the graph again. From ’55 to ’65 the curve is almost flat. That’s because inflation was stable and low, and defense spending was relatively flat. From ’70 to ’75 the curve is also flat, turning slightly up at the end. But the ’70s were a wide and deep trough for defense spending. The budget slid from a peak of $460 billion in 1968 to a low of $310 billion in 1975. The reason we see the left side of the trough represented as flat rather than trending downward is that while the budget was shrinking in real terms, at the same time inflation was blowing up to double digits. So they cancel each other out.
The point to be grasped is that by mixing the two variables together what you’ve got is meaningless. When you see your line curving or flattening out you won’t be able to tell why: Does that flat bit represent inflation disguising a fall in spending, or is it just low inflation and consistent spending? Is that crazy curve about inflation or a defense buildup--or is it about both? There’s no way to tell.
And yet, as you say, you’re a widely focused fellow, perhaps I am too narrow to see how “useful, one might say illuminating" this document really is. If so, I do hope you will take the time to edify me.
Published: February 10, 2008 10:06 AM
Kilmore
In fact maintaining of American empire is not expensive. Moreover it becomes cheaper and cheaper (in general) as HDP grows. This chart depicts inflation mostly. Social agenda, education and health care are much more demanding.
Published: February 10, 2008 12:38 PM
George Gaskell
what is so hard to understand about the point that data in real and nominal terms can tell very different stories?
Did you honestly think that a strawman argument would work on me? Really? Where did I say that raw and inflation-adjusted data did not tell different stories?
My point, if you care to actually read what I actually said, was that both of these stories (the raw-data story and the inflation-adjusted story) have informational or pedagogical value.
If you want to make an inflation-adjusted point, then I suggest you go make it. Start a website. Start an economics institute. Make whatever points, using whatever data, that your heart desires.
this chart simply does not make the point it is
intended to, and it opens the Mises Institute to
charges of dishonesty
Where is the "intended" point stated? The post that I am reading contains no text.
I propose that the "point" you are debating is one of your own imagination, rather than one actually contained in this chart-only post. (Maybe it's a point that's rattling around in your head right next to the imaginary argument that you think I am making.)
Incidentally, the proposition that it is dishonest to post accurate raw data is rather rich, to borrow a phrase.
Published: February 10, 2008 7:18 PM
George Gaskell
Now, a graph can’t prove intent
Are you actually "Person" posting under the name "Eliza"? Because this is one of his favorite tactics -- to commit a not-so-hidden fallacy by implying that every single post (on a blog, mind you) must independently constitute a complete logical proof.
This is a blog. Not every post is required to prove the validity of Austrian economics in its entirety.
Blog posts are citations of examples. They are relatively small contributions and comments that integrate with and support some element of the site's overall theme.
Neither this post nor any other is going to constitute a full-length treatise on every aspect of the history of US military spending from the end of WWII to today.
Your conclusions are fine. I have no real debate with them. But they rebut nothing I have said, nor do they in any way demonstrate the inaccuracy of THIS chart. It strikes me that if you want to deplore the growth of US defense spending, then go right ahead and deplore it -- start your own blog if you feel that there are points out there that need making.
perhaps I am too narrow to see how “useful, one might say illuminating" this document really is. If so, I do hope you will take the time to edify me.
I have, twice now, both of which you have ignored. The chart, as Kilmore mentioned, reflects mostly inflation. It charts the history of inflation as expressed through military spending.
This point, while different from the point that YOU want to make, is still a perfectly valid point. As you may know, inflation is created by the gov't pumping extra dollars into the economy, but the first user of new dollars gets the benefit of the pre-inflationary purchasing power. It takes time for new money to propagate through the economy. The first users get full value, long before later users experience the dilution of their old dollars.
Military spending is a uniquely governmental expenditure. There is no private market for these things. Therefore, all of these expenditures are first-user dollars. Therefore, the rise in military spending is uniquely useful in demonstrating inflation.
Do you see the change in direction of the blue line around 1973? That was right after Nixon closed the gold window.
These are themes and facts that are discussed on this site over and over again.
Published: February 10, 2008 7:42 PM
Dan Mahoney
For some reason, this topic is generating a lot of
very strong responses over a relatively mundane
topic (the true size of US defense budgets, as
opposed to the ghastliness of overall US foreign
policy), so I am not going to contribute any more
posts on the matter.
I will stress, though, that I was NOT implying
dishonesty on Jeff Tucker's part in posting a
graph with data not adjusted for inflation (allowing
for the various difficulties in such measures, as
many Austrians have highlighted). I was merely
pointing out that this is a rather standard way of
presenting much economic data, and someone
seeing this graph here might wonder what was
going on. I assume that trying to convince non-
Austrians of the rightness of our ideas is part of the
goal of this site?
Published: February 10, 2008 7:46 PM
marxbites
Piqued by Eliza'a link at Heritage, I instead found it very curious how few vetoes have been issued by our executives since JFK was rubbed out.
And also the Warren Commission staffed by and w/CFR thugs, and who's several members on the Commission had known fallings out w/JFK, as I had learned from James Dunlap's great Rothbardian analysis of the Commission's makeup here at Mises!
Before JFK's demise, vetoes were very numerous by comparison. The powers behind the curtain put a stop to that it appears.
Funny almost all presidents and their cabinets seem to have been CFR since Wilson, TR & Taft were all backed by the Rockefeller/Morgan ambits who conspired to create the Federal Reserve cartel they got Wilson to sign to his later stated regret in ruining America.
Joe Kennedy said "Fifty men run the country, and that's a high figure." Even though the Kennedy's weren't in the Wallstreet club, smugglers being a cut above and all, they got Teddy dancing pretty darn good for em now, eh?
I have to agree with Eliza, adjusted for inflation the defense chart ain't that bad, but certainly govt spending overall certainly is criminal, as criminals are wont to do.
Ron Paul is truly the cure we need most right now along with real money.
Published: February 10, 2008 8:11 PM
JAR
This chart is another confirmation of the validity of Parkinson's Law. If you are not familiar with Parkinson's (somewhat) tongue-in-cheek analysis of government's expansion regardless of its necessity, see: http://www.heretical.com/miscella/parkinsl.html first and then, http://www.mangst.com/lists/parkinsons_law.pdf , for the full article and refernce to the expansion of the British Admiralty after war's end. It has always puzzled me as to why economists have ignored Parkinson's law (and so many other variables) in their analysis. Years ago, in an attempt to bridge the gap between the ivory towers of Economics and Political Science, I wrote an economics paper analyzing government growth in light of Parkinson's law. The conclusion was that without an outside shock: a war, a war's end, a massive recession/depression or the end thereof, or...a balanced budget requirement, government does grow (in real terms) as Parkinson (and the chart above) indicates. Its seems Parkinson discovered something about human nature that pure quantitative analysis frequently ignores. The challenge is to deal with both the theoretical objective quantitative realities and practical human qualitiative realities. The chart above is a good conversation piece in that discussion.
Published: February 11, 2008 1:16 PM
Eliza
"...government does grow (in real terms) as Parkinson (and the chart above) indicates."
The chart above indicates nothing whatever about the growth of government in real terms. Although perhaps its maker meant you to think it does; it seems to operate as a trap for the unwary and the innumerate.
What it does depict is the nominal rise in US defense spending over the last 60 years. If you want to know what that looks like in real terms, see: http://www.d-n-i.net/charts_data/evolution_of_the_fy_2004_supplemental.htm. It's a rhythmic rise and fall, not an inexorable march up the slopes of Everest.
Published: February 11, 2008 5:50 PM
TokyoTom
Eliza, can you repost your final link? As is, it doesn't seem to lead anywhere.
Published: February 11, 2008 9:54 PM
Eliza
Oh, sorry about that, TokyoTom. This should work. http://www.d-n-i.net/charts_data/evolution_of_the_fy_2004_supplemental.htm
Published: February 12, 2008 6:05 AM
Eliza
I don’t really know what to say, George, except that you don’t seem to have the first beginning of a grasp of how markets work. I had given up on you, but this logjam of non sequiters is a clear cry for help; and hey, my heart isn’t made of stone. You write:
Military spending is a uniquely governmental expenditure. There is no private market for these things. Therefore, all of these expenditures are first-user dollars. Therefore, the rise in military spending is uniquely useful in demonstrating inflation.
Military spending is not “uniquely useful in demonstrating inflation,” quite the contrary. First of all, total spending fluctuates a great deal over the years due to exogenous factors that have nothing whatever to do with inflation--wars and the like. But for the sake of argument, say we’re talking about an index we create using a basket of military goods: the Military Price Index. The MPI would still be a “uniquely” unsuitable way to track inflation.
As you stipulate, there is no real private market for these goods, so--and this is key--the market can’t tell us how much they should cost at any given time--so we can't measure monthly changes in their dollar value. And the handful of companies (which form a quasi-monopoly) eligible to bid on big contracts have all sorts of influence over government procurement, so the prices they agree upon are not the result of a proper bargained for exchange. The MPI is going to reflect not just the value of the dollar but the value of the industry’s lobbying efforts. As well, the bulk of military goods are purchased via multi-year contracts. That means that not only do we not have the market to value the goods, but the prices are stickier than superglue.
The reason the CPI-U is generally considered to be the best measure of inflation is it is computed monthly using the prices of thousands of the most commonly purchased goods and services. Using a large sample controls for the influence of exogenous factors: if the orange crop fails, the price of orange juice will go up, but that’s nothing to do with the value of the dollar. And the goods chosen represent a broad cross-section of the economy, rather than inflation in just one sector.
As for first-user dollars, you fall into a horrible muddle trying to connect the concept to the matter at hand. Do you think the DOD totals up its bill every year then sends it over to its pals at the BEP to print up the money to pay it? That’s just not the case. If it were, we wouldn’t be paying taxes up front. What the Fed does is monetize a portion of the entire federal budget deficit every year. Now that’s bad, and it’s inflationary, but it’s connected to the total federal budget deficit. The DOD has no budget deficit, and makes up a very small percentage of federal budget, so fluctuations in its annual spending won‘t effect how much of the deficit is monetized. Additionally the Fed only does as much as it thinks it can get away with each year; that varies. And anyway, the Fed fixing government deficits is only a very small part of the picture when we look at the causes of inflation.
Finally, one last time I will say that to do what you wish to do--show a relationship between defense spending and inflation--you must chart the variables separately. If you want to show the effect of inflation over the years, you're surest bet is to reference a chart of the Consumer Price Index.
But keep studying, George. I don’t suppose I really believe anyone is truly unteachable.
Published: February 12, 2008 7:11 AM
George Gaskell
The DOD has no budget deficit, and makes up a very small percentage of federal budget
Defense spending is 20% of the total budget (and half of its discretionary spending). That's "very small" to you?
I'm not sure it is possible to have an intelligent discussion with someone whose sense of proportion and scale is so skewed.
In any event, I will state my point one last time (which, I am sure that you will grasp if you put your calculator down for one minute and look at the BIG PICTURE -- no one is unteachable, after all): this site, of which this chart is only one tiny part, is dedicated to something more, something broader than merely the proposition that one ought to "deplore the growth of US defense spending" or a "studying particular trend, in this case the rise in military spending."
In general, yes, Austrians deplore military spending, but to focus on military spending in isolation is to somewhat miss the point.
In other words, my response to your comment all along has been directed to the mode of argumentation. You, however, have mis-stated the argument 3 or 4 times now. You have assumed, without really explaining the basis for doing so, that what Mises.org really ought to be doing is "deploring the growth of US defense spending" or a "studying particular trend, in this case the rise in military spending."
There are quite a few sites out there that already do that. Most are on the Left. These people make these arguments, in large part, so that the fat portion of the federal budget that constitutes defense (which nowadays is only part of the larger category of "security" spending, which includes expenditures by our Dept. of Fatherland Security and other agencies) can be diverted to various forms of welfare.
You haven't given the wrong answers; you are asking the wrong questions.
Published: February 12, 2008 9:27 AM
Justin L
Jaq Phule wrote: "Looks like Eisenhower managed to cut spending during a recession. Somebody unearth the 'I Like Ike' buttons, and maybe Ike himself. We have a new libertarian write-in VP candidate for November."
I wouldn't be so quick to unearth Ike and put him on a platter. He most likely would have had a strong hatred for anyone barely resembling Badnarik or Paul. From a letter he wrote in 1954 to his brother Edgar:
Source: http://www.eisenhowermemorial.org/presidential-papers/first-term/documents/1147.cfmPublished: February 13, 2008 12:14 AM
pomofo
Eliza,
It would be helpful if the charts you quote were accurate. From the footnotes it seems that they may be compiled from different data than the St. Louis Fed's figures, which are received from the BEA. BEA data available at http://research.stlouisfed.org/fred2/series/FDEFX?cid=107 (click on View Data.) The discrepancies are as follows:
Year: Your inflation-adjusted figures (BEA figures adjusted for 2007 dollars according to CPI calculator at Minneapolis Fed):
1949: 150 (174.2)
1952: 530 (379.4)
1955: 301 (363.55)
1968: 460 (527.78)
1975: 310 (388.01)
1984: 500 (546.68)
1997: 320 (443.92)
2007: (634.8)
If you graph the figures from 1947 to 2007, you do see peaks and troughs, but they are not as severe as the DNI and Heritage figures suggest. Each peak and each trough is higher than the previous one, and the trend line is steadily upward.
I'm sure that you might quibble with the methodology of calculating these numbers, but the same could be said of any data. Suffice it to say that the BEA's figures will always be viewed as more objective than those coming from an ideologically-driven think tank.
Published: February 13, 2008 11:53 PM
Eliza
I've no interest in pettifogging the details, pomofo. Adjusting large sums that go back 60 years is a notoriously controversial enterprise (with huffy accusations of "inaccuracy" flying back and forth), which is probably why the St. Louis Fed released the raw data and left it for us to deflate as we see fit.
My point is that, intentionally or not, the chart above is substantially misleading. And you'll never be able to torture the real data into corroborating the tale the nominal data are telling.
Perhaps you think that the audience of this blog are far too sophisticated to commit such an elementary error as misreading this chart, particularly after the first two posters flagged its failure to account for that great preoccupation of Austrian economists, inflation. And for the most part that's true. I've noted the many extraordinary, very well read people who post here; it's telling that not one of them has stepped forward to defend this chart's utility. On the other hand, a quick skim of the thread reveals several posters who are less experienced thinkers.
Math is hard. Economics is hard. Why make things needlessly confusing for people who come here to learn?
Published: February 14, 2008 6:26 AM
George Gaskell
My point is that, intentionally or not, the chart above is substantially misleading.
Accurate, raw data is misleading. Brilliant.
... less experienced thinkers
I would think that somebody affecting this level of faculty-lounge condescension would have at least the ability to comprehend, particularly after it has been pointed out several times, that this blog post made NO assertion that it was "deploring the growth of US defense spending" or was "studying particular trend, in this case the rise in military spending," and, therefore, decrying its failure to do so is a textbook example of a strawman argument.
Logical reasoning is hard.
Published: February 14, 2008 8:59 AM