GDP versus DEBT


By: Brooks A. Mick

Somebody has finally taken the simple step of producing “The Graph of GDP versus DEBT.” You would have thought some bright economist might have done this before, wouldn’t you?

Technically, it’s the graph of delta-GDP (the change in GDP) versus delta-DEBT (change in debt).

http://economicedge.blogspot.com/2010/03/most-important-chart-of-century.html

Click on it, read it, think about the implications. For every dollar spent at the end of 2009, the economy was DAMPENED by 45 cents. That is, the deficit so-called stimulus spending was hurting the economy drastically. Is it then any wonder why we have had no significant recovery and why the recovery, pitiful as it is, has been essentially jobless? Is it not, based on this simple graph, obvious? We have reached debt saturation 6 years ahead of schedule. Worse, we’ve achieved a phase reversal whereby not only does government spending not produce any significant positive change in the economy, it damages the economy.

The implications of this are clear:

1) We have to stop deficit spending.

2) We have to start paying off the debt.

3) We must drive the wooden stake through the heart of Keynesian economics.

The only hope for survival of the country, assuming that there is still a chance for survival, is to pare government down massively. Warren G. Harding cut government 50% and ended the Depression of 1920-21 in the shortest time span in history. Maybe it’s not too late to work this time.

Every serious conservative candidate for the presidency should carry a copy of this graph in his pocket or insert it into his lecture slides–or pull out a Ross Perot hold-up posterboard! Every serious conservative candidate should pound this chart home until it sinks in to the consciousness of every citizen of the country–or at least the consciousness of every voter

And every debate moderator should have a copy of this graph and pull it out and ask each and every candidate to explain what this means to the policies he proposes.

There it is. Short, sweet, and complete. It’s one of only two significant issues facing the country today. (The other is Islamic Supremacist Jihad, but I’m not going to cover that now other than to say George W. Bush was correct: The long-term solution is converting the breeding grounds of terrorism into semblances of decent society. The short-term solution is to kill terrorists.)

Sorry I couldn’t make this longer. But gee whiz, it is SO SIMPLE!

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