Sunday, October 5, 2008

One Way of Looking at It

Now isn't this interesting? I found this in this piece on Open Left. The most important way to look at the debt from the macro-economic point of view, according to author Paul Rosenberg, is as a percentage of GDP, which is essentially the tax base the government can use to pay the interest on the debt, and eventually, pay it down.

The numbers shown here show graphically, if you'll pardon the pun, what's happened in this realm over the past 60 years. The percentage went steadily downward until the Reagan presidency and the introduction of his "government is the problem" philosophy and the voodoo economics that have given us the gargantuan financial mess we're in now. What's the import of these figures? Two things, according to the writer: first, despite the incredible stupidity of the bailout, it's not the end of the world; our levels of debt can remain manageable, provided "the next President is sane (i.e. not a Republican)." Second, and obviously: supply-side, voodoo economics don't work. They spawn massive and needless increases in public debt.

See? I'm not always a gloomy Gus. I know you were dying to hear something positive about the detestable Wall Street bailout, so you can pin a little hope to this theory.
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