Which political party specializes in irresponsible spending?

January 13, 2008 | By | 5 Replies More

You’ll see the clear answer in this colorful graph.

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Erich Vieth is an attorney focusing on consumer law litigation and appellate practice. He is also a working musician and a writer, having founded Dangerous Intersection in 2006. Erich lives in the Shaw Neighborhood of St. Louis, Missouri, where he lives half-time with his two extraordinary daughters.

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  1. Mary says:

    Of course Republicans will counter with some sort of rationalization for their overspending.

  2. Erich Vieth says:

    Mary – I agree. But it's always the same explanation, for everything: Drumming up the threat of terrorism and attacking countries where it will accomplish nothing at enormous cost; bashing gays, immigrants and anyone else who is "different"; promoting the health of fetuses and ignoring the needs of children who are born; and the protecting the bottom line of their big contributors.

    These are the bottom line reasons for almost everything the Republicans do. That's the Republican platform and that's why our country is in desperate shape right now. It's all so sad and sick and dangerous.

  3. Mary says:

    You're right, Erich, the explanations are always the same. We never seem to be able to move beyond. I'm hoping for big changes during the upcoming election.

  4. grumpypilgrim says:

    That chart might not be as "clear" as we think. For example, the chart appears to not use constant-year dollars, so some of the 'increases' appear to be due, in part, to the declining value of the dollar.

    Another observation is the linear scale on the vertical axis. To properly account for the effects of compound rates of return (or of debt, in this case), the chart should use a log scale.

    Yet another thing to keep in mind is that debt is not necessarily a bad thing during times of inflation, because the dollars used to repay the debt are worth less than the dollars borrowed. This is related to the first point above.

    Yet another thing to keep in mind is that debt is a good thing if the borrowed money is invested in a such a way that it returns more than the rate paid on the loan. For example, if you borrow at 2% and invest in something that pays 4%, then you're earning 2% on every dollar borrowed. Thus, the chart tells less than half the story: to know the whole story, we need to know how the borrowed money was spent. Of course, in the case of George W.'s borrowing, we know where the money is going, so we know it's not 'smart' borrowing.

  5. Dan Klarmann says:

    Grump: Constant dollars would be better, but I disagree about the log scale. This is a chart of annual change (the first derivative) not of the debt itself.

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