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The point of Krugman's graph was to illustrate that the true driver of the deficit is un-funded tax cuts for the rich and military bloat from the Bush years, not to show the decline in the deficit. The...
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Dean says "The deficit was just 1.2 percent of GDP in 2007 and was projected to remain low...". When the economy is in a bubble, revenues are abnormally high and projections are usually too optimistic....
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I agree with Chris, above. Krugman was not trying to present a "graph that gives a better picture of the problem of the budget deficit in relation to the economy," but rather a chart showing the...
View Article" too large to sustain indefinitely" - Really?
The slope of the line of the deficit-to-GDP ratio is clearly negative and has been since 2009 even though GDP has been increasing far below its potential. With more stimulus, GDP growth would...
View Articlemisleading because these deficits are not from spending...mostly transfers
Essentially there is no macroeconomic problem. As most economists know, transfers are not really a "deficit", in the sense of taking resources out of the economy. Government spending like foolish wars...
View Articleobama/bush tax cuts and revenues
Most of the loss in revenue from these cuts is in the meat of the population, the middle class cuts. This is true going forward. This is why Obama should have shut them down in 2010 and returned to...
View ArticleDeficits correlating to unemployment
Interesting that the unemployment rate shadows the deficit/gdp % . Of course, correlation does not imply causation. If anything unemployment caused the deficits to remain high after the initial saves...
View Article@chris and @stuart
You have both, I think, missed Dean's point. Krugman's blog post was not focused on "drivers" of the deficit, but on Bush tax cuts in particular. Krugman said, "So now we face a substantial long-run...
View Article@Anthony
Dean's criticism of the graph has to do with the context and conclusions, he's not saying that the data is misleading. There's nothing misleading about the CBO saying the future projected deficit...
View ArticleOf course
What nobody wants to discuss is that we actually need to run BIGGER deficits. 1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819. 1823-1836: U. S. Federal Debt reduced 99%. Depression...
View Article@Chris
You are still misreading Dean's post, I think. The graph gives the deficit in nominal dollars, not as a percent of GDP--which tells you what damage a certain "deficit driver" is truly causing the...
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The point Krugman is making with the graph, "we face a substantial long-run deficit largely created by those tax cuts" is true and is not supported by Dean's graph. It would have been better as GD;P,...
View Articlethere's no going back to 2007
If we can go back to the CBO's deficit projections from 2007 or 2008 then why not go back to the CBO's projections for potential GDP in 2007? If it is conceded that the markdown in potential GDP...
View ArticleWow Brian
Derailed growth is what caused shyrocketing deficts. Restoring growth through adequate stimulus will make them easily manageable again. That is what "history" shows. The "contemporary value" of that is...
View ArticleDeficits
Too much time is spent discussing budget deficits. The government borrows money from us (as investors) at essentially the risk-free interest rate and invests it predominantly in us. We - as tax payers...
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@Mike I would add that running trade deficits means we have to run federal deficits. Those federal deficits are our private sector surplus. - Mcwop
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I’m a bit taken aback by Dean’s criticism of the graphic that Paul Krugman used in his blog, as I usually feel that Dean is on target with his critics and analyses. Personally, I think that the Center...
View ArticleWe need a hybrid graph
The problem with Dean's graph is that conservatives take one look at and see clear evidence of Obama's out of control spending. They say, "see look, there's proof right there, right around when Obama...
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