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Originally Posted by dc_dux
Ace...I fail to see how your charts paint a different picture than mine.
Your first one shows how the national debt as percent of GDP went down during all Dem presidents and up during Reagan/Bush I and Bush II
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It shows an upward trend during Clinton's first few years in office, then a decline. When Bush II comes into office the down trend reverses but stays in the same range as it was when Clinton was in office. Like I posted earlier, I think you don't see the impact of a new administration immediately. I think the downward trend started during Clinton's term was in part a result of the previous administration. I also give Clinton some responsibility for the reversal during Bush II's term. I think today we are getting some announcements on deficit reductions due to the Bush tax cuts.
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Your second shows how receipts exceeded outlays for the first time in a long time under Clinton(i.e. surplus) and how outlays are exceeding receipts under Bush. And, the annual budget deficit has been worse in each of the last 5 years than anytime since WWII.
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True. I also see an overall upward trend in outlays. An argument could be made that the dot com bubble burst had an impact on tax collection at the start of Bush's term. The increase in deficit spending was a result of a sudden drop in tax collections. This drop seems to have occured before the Bush tax cuts would have had an impact.
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Maybe you can explain your interpretation a little better.
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Looking at the deficit in absolute dollars is misleading. If your income is $100,000 and you have $50,000 in debt, that's a 50% ratio. If you income is $1,000,000 and the debt is $250,000, that's a 25% ratio. I would not compare the $50,000 to the $250,000, I would compare the percentages. equally important, at least to me, is measuring the deficit in consistant dollars, or making adjustments for inflation.
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I dont think it will lead to a disaster, but simply that the fiscal policy of the last 5 years has taken us in the wrong direction.
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An important question is what was the cause. I don't think the cause was a policy issue or the tax cuts. The overall trend shows no spending discipline in Washington - democrat or republican
One more observation. If you look at my second graph, and the look at the receipts line - if you draw a straight line from 1996 to 2006 connecting those two points. What you see is an anomoly - a 'N' pattern. This tells me there was a spike in reciepts and then a sudden drop. This had nothing to do with spending, but had a big impact on the deficit both positive and then negative. If you see it and agree, then we need to discuss the cause of that pattern to arrive at our answer.