Tea Parties & Historical National Debt

Bruce Bartlett, it appears, is unimpressed by the Tea Parties.  Inspired by his article, I chased down some data, and generated this pretty graph of publicly-held national debt as a percentage of GDP:

Historical Publicly-Held Debt[Notes:  Quarterly debt data from the St. Louis Fed.  Quarterly GDP data from Table 1.1.5 of BEA’s NIPA tables.]

IMHO, the most that can be said for Bush’s deficit policies was that the debt/GDP ratio stabilized during his second term.  Even this middlin’ performance, however, contrasts unfavorably with Clinton’s second term (not to mention Chile’s recent experience).

Yes, both the recent rise in public debt, along with possible future increases, are certainly worrisome.  However, insofar as such worries – e.g., crowding out of private investment; aggregate interest costs; concerns about America’s future ability to service its debt; and higher interest rates resulting from the latter – are a function of the overall level of debt, I suspect they’d be less salient today had we been more fiscally responsible in the past.


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