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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...