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Hopefully, the banks we're keeping on life support won't hinder the recovery like they did in Japan in the 1990's. An L-shaped recession is still a possibility.
Here are the GDP stats (from the BEA).
As for spending as a % of GDP, it looks like it was around 50% at its peak towards the end of WWII. So that would translate to about $7 trillion per annum today.
Per the BEA, US GDP is at $14 trillion in current $. So 50% of that is $7 trillion. I guess we're ready to double the current $3.5 trillion monstrosity to whip the ol' recession monster.
Hopefully, the banks we're keeping on life support won't hinder the recovery like they did in Japan in the 1990's. An L-shaped recession is still a possibility.
Gross Federal Debt by year:
1960 290,525
1961 292,648
1962 302,928
1963 310,324
1964 316,059
1965 322,318
1966 328,498
1967 340,445
1968 368,685
1969 365,769 Last reduction in debt... Nixon's administration!
1970 380,921
1971 408,176
1972 435,936
1973 466,291
1974 483,893
1975 541,925
1976 628,970
TQ 643,561
1977 706,398
1978 776,602
1979 829,467
1980 909,041
1981 994,828
1982 1,137,315
1983 1,371,660
1984 1,564,586
1985 1,817,423
1986 2,120,501
1987 2,345,956
1988 2,601,104
1989 2,867,800
1990 3,206,290
1991 3,598,178
1992 4,001,787
1993 4,351,044
1994 4,643,307 up by 6.72%
1995 4,920,586 up by 5.97%
1996 5,181,465 up by 5.3%
1997 5,369,206 up by 3.62%
1998 5,478,189 up by 2.03%
1999 5,605,523 up by 2.32%
2000 5,628,700 up by 0.41%
2001 5,769,881 up by 2.51%
2002 6,198,401
2003 6,760,014
2004 7,354,657
2005 7,905,300
2006 8,451,350
2007 8,950,744
Yeeeeeeeeeeaaaaaaaaaahhhhhhhhhhh!!!!
What's the CAGR for that period?1981 994,828
1982 1,137,315
1983 1,371,660
1984 1,564,586
1985 1,817,423
1986 2,120,501
1987 2,345,956
1988 2,601,104
1989 2,867,800
1990 3,206,290
1991 3,598,178
1992 4,001,787
2001 5,769,881 up by 2.51%
2002 6,198,401
2003 6,760,014
2004 7,354,657
2005 7,905,300
2006 8,451,350
2007 8,950,744
And you can't use the 'Dems controlled the Congress' line for most of that last series.
That's real nasty numbers. Remember though, president Reagan inherited double-digit inflation! Borrowing with bonds anyone could buy were paying double in 5-years.
Any clue what Obama's spending will become with double digit inflation that can occur?
Neither party can be trusted with the national purse at this point. The problem, of course, is that the people essentially don't care. Politicians give the people ultimately what they want, and the people want low taxes and all kinds of government expenditure.
Your point? That deficit spending made it better?
It has been argued that the Japanese tried to get out of the Keynesian economics too early, thinking the worst had passed by.
As they tried to cut spending their economy plummeted again. It took another round of big spending to finally get out of the hole then.
Really WC, you have Paul Volcker's tight money policy to thank for keeping inflation in check under Reagan.
This much is true. Plus the Keynes model implicitly states that as the economy recovers, the extra spending should be cut, and you need to use the economic boom times that always follow recession to balance the economy again.
Due to our political system, this part of the bargain is the one that never happens.
We've been over this before. Why do you beat a dead horse?Your point? That deficit spending made it better?
Krugman's argument now is that Japan didn't fix the banks, even though Japan more or less followed his prescription for massive stimulus.
What dead horse? You haven't even made a point yet.
Meanwhile, Bubble Ben keeps the Fed's lights on at night...
Is there even an arguable example of Keynesianism working since Bretton Woods was no more?
One more thing. As far as philosophies go, you either have to go with Keynes or Friedman. But Friedman type of policies is what got us here in the first place (unfettered freedom to the free markets, etc).
That's the only reason we're going with Keynes, as far as I understand the conundrum.
Please stop being Chump the 2nd.
This thread is not about the Reagan era. We have been over that in previous threads. You want to discuss that, start a new thread please.
My point is that there was no real surplus under president Clinton. Now that I made it, you are changing the subject. Cannot tolerate the truth?
Hmm. If Obama's rosy scenario pans out, I guess we can point to us.
Answered in next post..
Are those numbers adjusted for inflation? Because here's a graph with the adjustment applied:
I can readily tell where the Clinton period was.
From here: http://en.wikipedia.org/wiki/United_States_public_debt
eh? Friedman was for no limits on the growth in the money supply and excessive government spending?
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