Two bubbles down. Who knows how many left to go?
This post inspired by Jazzbumpa from the comments.
Update:
Mr Slippery requested a chart showing government expenditures using the same methodology (also per capita and adjusted for inflation).
Cyclical problems can be solved with cyclical solutions (deficit spending) but structural problems require structural solutions. Over the long-term, we cannot continue to grow government spending without also growing government receipts. The longer it takes us to realize this the bigger our problems will be.
Source Data:
St. Louis Fed: Federal Government Current Receipts
St. Louis Fed: Current Expenditures
St. Louis Fed: Population
St. Louis Fed: CPI-U
Stag,
ReplyDeleteI'm just glad we have an elastic currency and Government automatic stabilizers to counterbalance Wall Street's automatic destabilizers. The ledger must balance!
It's a counter-intuitive system, but it works (at least for a small minority). Prudence is neither required nor rewarded. Fraud is not only ignored, it's subsidized and is the surest and quickest path to wealth.
Punish the prudent and reward the incompetent and criminal. Animal spirits (fraud) for the win!
We can't all be pirates! Sigh.
ReplyDeleteWe can't all be pirates!
ReplyDeleteFortunately, the majority can be dupes.
Oh well, at least the majority get to believe they're pirates during the bubble phase of the cycle.
Can you add inflation adjusted federal government spending to that chart? It looks like a Fed generated chart so it may not be possible. Thanks.
ReplyDeleteBubbles ? This chart simply shows
ReplyDeletethe success of the "starve the beast"
Republican con job. The change in the
behavior of receipts post-1983 shows
this. It also shows how Clinton's
raising of taxes was a little to
late to return the behavior of
receipts to that exhibited
pre-Reagan.
If anything, this chart shows the
magnitude of the damage done to the
country by the self-proclaimed
"fiscal conservatives."
Mr Slippery,
ReplyDeleteI generated the chart using the tools at the St. Louis Fed. It might not be as pretty (subjective opinion of course) or descriptive compared to downloading the data and doing it myself, but it certainly is much faster. I'm all about productivity miracles here. ;)
I'll update the post with your request shortly.
In Hdell's Kitchen,
ReplyDeleteIn my opinion, the Republicans love stock market bubbles and the Democrats love housing market bubbles. Neither ended well.
Just an opinion of course.
Over the long-term, we cannot continue to grow government spending without also growing government receipts.
ReplyDeleteStag,
We're sure going to try though. In the short run, Government spending is hailed as a solution. Over the long run, I doubt that holds, especially if the past forty years is an indicator.
Also, there is nothing special about private debt as opposed to Government debt. Unproductive debt is unproductive whether it's private debt or Government debt. We've got a badly mismanaged system on both the private and public sides. I blame the eCONomists (aka propagandists).
I see a Japanese malaise as our future. Who can say for sure?
mab,
ReplyDeleteWe're sure going to try though. In the short run, Government spending is hailed as a solution. Over the long run, I doubt that holds, especially if the past forty years is an indicator.
People are going to think that we're the same person! This is what I was typing in the comment to my latest post as you were typing that.
40 years. That's how long we've been using deficit spending to "help" the economy. We'll just have to wait and see how that works out long-term. Say another 40 years?
Needless to say, I agree with you 100%.
we cannot continue to grow government spending without also growing government receipts.
ReplyDeleteBut we HAVE been growing government receipts. We just spend EVEN MORE anyway.
Charles Kiting,
ReplyDeleteBut we HAVE been growing government receipts.
If adjusted for inflation and population growth, current federal government receipts are roughly at 1995 levels.
In my opinion, that's what should happen though. Government shouldn't need more than that.
And don't even get me started on sales taxes. The rate in my state only seems to increase. The extrapolator in me wonders what happens if it hits 100% someday. Sigh.