Subject: Where Did Our Debt Come From? - Atlantic Fallows (Please Read)
From: "Michael Andrews" <[email-masked]>
To: "Hunter Biden" <[email-masked]>, "Eric Schwerin" <[email-masked]>, "Curtis Hastings" <[email-masked]>, "Devon Archer" <[email-masked]>
Date: Tue, 16 Nov 2010 10:29:00 -0500

Where Did Our Debt Come From?
NOV 16 2010, 7:32 AM ET

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?

Hint:
      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 chart is the average annual rate of  
growth or reduction during that administration. As Spinney said in a  
note, "The ideas of this column is to simply 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...