Monday, April 15, 2013

Dunno how I missed this...

Previously, comparing the real non-Federal deficit to the size of the economy, I missed the fact it was as low in the early 1990s as it was before the mid-1960s:

Graph #1: Change in Debt Other Than Federal (Adjusted for Inflation) Relative to Real GDP
The economy was good then, in the 1950s and '60s.

After the 1986-1992 decline, the trend turned around and the economy was good again in the 1990s. Until those deficits got too big, again. And just to be clear, we're not talking Federal deficits here. We're talking everybody else's deficits.

People always say bigger is better. But with debt and deficits, bigger is more costly.

And "costly" means trouble for growth.

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