The world in red and blue (2)

My graph from yesterday:

Graph #1: Domestic Financial & Gross Federal Debt, relative to GDP
Red is Federal. Blue is Financial.

I am fascinated by the parallel of the red and blue lines between 1980 and 1995 or so. I want to look at the difference between the red and blue lines. If I take the graph above, take the red line and subtract the blue line from it, it looks like the graph below:

Graph #2: Gross Federal less Domestic Financial Debt, relative to GDP

Well look at that! The golden-age curve is now a golden-age straight-line decline from 1950 all the way to the 1974 recession.

Then there is a possible sniff of decline from 1974 to 1980, but the line is really very flat from the mid-1970s to the mid-1990s. That is the time of parallel and near-parallel red and blue lines on Graph #1.

Then beginning in the mid-1990s with the balancing of the federal budget, our trend line drops to zero and drops rapidly to near 50 percentage points below zero -- meaning that the gross federal debt fell to about half the level of domestic financial debt. Or, to put it more in the context of what actually happened, domestic financial debt grew far, far faster than the gross federal debt:

Graph #3: Domestic Financial & Gross Federal Debt, Billions
Red is Federal. Blue is Financial.

Until the crisis, of course. The crisis changed everything.

But now I'm fascinated by the apparent long-running closeness of the red and blue lines.