Where Did Our Debt Come From?

By James Fallows
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Chuck Spinney, who spent his career as a budget analyst in the Pentagon -- that's him, on the cover of Time for his defense-reform work in the Reagan era -- has an idea about the answer. The green in the chart below shows periods when America's overall federal debt burden shrank; red, when it grew. Spinney, by the way, is no one's idea of a standard liberal. He's more a deficit hawk than anything else, meaning both that he's hard-line against excess spending and that he's pro-defense but cheap. He explains the chart he has prepared:

>>Obama inherited a federal deficit that was spinning out of control (mostly because of decreased tax take and increased expenditures for automatic stabilizers, e.g. unemployment insurance), and pressure is growing to cut Social Security (perhaps the most efficiently run program in government) while placing Defense (one of the most inefficiently run programs) off limits. These political pressures are not new and in fact have been building up for years. So, as a first cut into a complex issue, perhaps it is time for the angry masses to ask which political party put them into the fiscal straight jacket that is setting them up for this horrible choice?

A. Democrats?
B. Moderate Republicans?
C. Right Wing Republicans?

     Green => Reductions in the burden of Gr. Fed. Debt (as measured by the debt to GDP ratio)
     Red => Increases in the burden of Gr. Fed. Debt <<

To be clear: the middle column is how much overall federal debt grew, or shrank, as a share of gross domestic product during each administration, and the right-hand column is the average annual rate of growth or reduction during that administration. As Spinney said in a note to me, "The idea of this column is simply to show the average annual change for the period covered in the first column -- so you can compare one term administrations to two term administrations in terms of their annual performance.  The first row of the second column says, for example, that the average debt burden ratio declined by 4.7% during each year of the Truman administration."

When the economy is growing faster than the debt, that administration looks "green." When it isn't, red. The chart may give a slightly unfair boost to Harry Truman, whose administration coincided with the end of huge outlays and borrowing for World War II. Otherwise...

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