After stumbling upon the U.S. Government Debt website and fiddling with their charting tools a bit, a chart that I’ve never seen before appeared – a very long-term picture of public U.S. debt relative to GDP going back to 1792. Back in the old days, the only time the nation would rack up debt was when they were at war and then they’d pay it down
All that changed not long after the last vestiges of a gold standard were abandoned in the 1970s and it’s been a three-decade long climb up debt mountain ever since. Moreover, since the graphic above includes only public debt, the picture is significantly worse when including intergovernmental liabilities such as social security (see comment below).
![[Most Recent USD from www.kitco.com]](http://www.weblinks247.com/indexes/idx24_usd_en_2.gif)
And you know what responsible governments do after they go to war?
They don’t say things like “deficits don’t matter”. They raise taxes to pay for that war.
That’s why I laugh when the political establishment talks about austerity measures that include cutting taxes. When you rack up a huge credit card bill, you don’t go looking for a job that pays a lower wage.
Good News!
I’ve been informed via email that the “Gross Public Debt” data above does include intragovernmental liabilities, so, it’s no worse than depicted above.
Whew!
Tim, I think the real comparison needs to be for debt to the public, not gross public debt. Congress has the ability to simply cancel promised future benefits (medicare, social security, etc). Take social security for example. I have been dutifully paying into the system, yet one option they are exploring to save money is to cancel my social security benefits if I make too much money. They can also change retirement ages, etc. They could also simply roll these trust funds back into the budget. This is a much different animal than a bond.