Ezra Klein explains thirty years of the debt ceiling in one graph (note the Congressional control appears to be backwards):


Category: Credit, Politics

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

29 Responses to “National Debt Ceiling Explained in One Graphic”

  1. osbjmg says:

    Represented, yes but explains? Why do we care about the president so much? He has veto power, but the budget is set by congress.

  2. IanMc says:

    Reds and Blues are wrong on the house line of that chart.

    Also, looks like we broke through the ceiling last year of the Juniors Presidency. Maybe that was the IOU that was scribbled onto a napkin by Paulson?

  3. GeorgeBurnsWasRight says:

    If I were doing the charts I would adjust most of the dates to reflect who was in office when the budget was passed. Just showing who was in office when the money was spent ignores the fact that politicians are serving for most of their first year under a budget passed by their predecessors.

  4. Moss says:

    The growth ‘miracle’ clearly started with Reagan. Since the efficacy of deficit spending is more potent when the cumulative debt is lower (relatively speaking) the ‘policies’ appear to be effective. Reagan was simply early to the game, the early adapter. He basically doubled it in 8 years.

  5. brianinla says:

    Why do people still talk about red v blue. It’s inside vs outside. If you think your elected official represents you then you need to wake the eff up.

  6. machinehead says:

    Actually the color assignment is backwards — in my opinion, Democrats ought to be the red or pink party, while Republicans should be blue. Who ever heard of the more rightist party being on the pink end of the color spectrum? But some bizarre, pre-emptive Big Media decision was made years ago to invert the colors, perhaps just to confuse everyone, and they’ve been unintelligible ever since.

    Big Media don’t tell me what colors to use. Up theirs!

    Arithmetic charts are so deeply engrained that it’s hardly worth belaboring the point that when dealing with an ‘elastic currency’ over decades, only a log chart will show meaningful changes in slope … whereas an arithmetic chart will ‘go parabolic’ even at a constant rate of increase.

    Ponder this: Why is there no third color in this impoverished chart?

  7. rip says:

    Might be interesting to put it on a log scale of percent change. As in the magic of compounding.

    Don’t think it will change the recent part, but will put more focus on the Regan BS years.

    And yeah, BSO is off to the races trying to out Republican the Republicans.

    Well, there’s an election coming up soon. And he’s got to raise billions. So don’t expect the little guy to get represented any more than necessary for re-election.

  8. victor says:

    So this is one way of visualizing Zaulauf’s point that “Austerity programs are incompatible with Democracies”? It would be interesting to also graph our unfunded liabilities and compare them with other nations’.

  9. davossherman@gmail.com says:

    These effing morons couldn’t find their ass or recognize a bankruptcy with both hands and the lights on.

    The ONLY answer, what will happen, is the dollar will be re-valued. 3,800 other Fiat currencies have died, and since the IMF was birthed by the communists it has presided over 200 re-valuations.

    The bankers have fucked us. Clowngress has fucked us. Obama is a moron.

  10. davossherman@gmail.com says:

    PS the 14/16 trillion is the drop in the bucket. Like Enron, most of our debt is off balance sheet. Use Pimco’s Gross’s figure of 76 trillion, use mine of 128 trillion or use Kitlikoff’s 200 trillion.

    Anyway you slice it, the unfunded liabilities are the 900# gorilla in the room. 14 trillion is pocket change, it is the mouse in the room.

  11. LiberTea says:

    It’s joke to call this moving target a ‘ceiling’
    It has historically not been an upper bound of anything,
    and will not be in August,’11 either.

  12. ilsm says:

    “Deficits don’t matter………………..”

    When wall st is flush, and there is no liquidity trap.

  13. This chart is unfair as the budget cycle begins one year after a Prez takes office but a good illustration of the overall problem. Reagan is still undefeated in percentage (up 300%) – hopefully that record will never be broken! The reality is Bush II was good for $6Tn of increases (100%) and Obama just $2.5Tn (so far) in his first two budgets so he has a long way to go if he wants to take on the champ!

  14. leeward says:

    if we lived in a time when people used and actually meant phrases like “the buck stops here” then this discussion about incremental debt burdens might be productive but we all know the party has been over for hours and the sun is about to come up. We need strict transparency and control of how political donations & lobbying funds flow through & around our different branches of government and how that influences what programs become indispensable. Otherwise this debt ceiling issue is like a skit with members of Congress playing Sgt. Shultz . (Hogan’s Heroes analogy)

    And while I appreciate the cartoon just posted after this post, our addiction to deficit spending is not going to be solved with more borrowing any more than a healthy recovery will ever develop if it is based on exponential credit creation. It’s time to regroup and get the hangover over with.

  15. Winston Munn says:

    At the end of 2004, OASDI had $1.5 trillion in assets (primarily held in “special treasuries”, which are non-redeemable in the bond market – in other words, pure U.S. government I.O.U.s). The reason there is so much in assets is because in 1983 there was a huge push (faked) by Greenspan and Reagan to “save” SS by increasing FICA payments while reducing benefits and changing COLA – these alterations were made to provide SS with funding through 2056.

    What happened?

    The increased taxes were used to fund the general budget while I.O.U.s (special treasuries) were given to the SS trust fund – unfortunately, payments from SS must be made in cash, but the cash has been spent.

    This is why there is a push to cut SS benefits – not because SS is a problem, but because the money that was supposed to be there has been pilfered.

    If Obama or any other Democrat gives in on either SS or Medicare, he should be tarred and feathered.

    The discretionary spending comes in the form of wars, defense, and homeland security. Social programs are not the problem,

  16. socaljoe says:

    Talk of the “national debt” is a diversion.

    It pales in comparison to social welfare “off-balance sheet” obligations.

    Where’s the $6 trillion that the agencies have lent into the economy?

  17. philipat says:

    If this was a market, it would be ripe for a correction?

  18. Syd says:

    The Republicans controlled the House from 1995 until the end of 2006, and controlled the Senate for 10 of those same 12 years.

    Estimate of the total cost of the Bush tax cuts from 2001 to 2010: $2.1T ($2.5T including interest). (http://www.taxfoundation.org/news/show/26314.html)

    Estimate of the total costs of the wars in Iraq and Afghanistan from 2001 to the present: over $1.2T. (http://costofwar.com/en/)

    Those tax cuts and the profligate military spending continue. Yet the economy is weak, and the federal budget is way out of balance. Republican economic/fiscal policies (aka Reaganomics, aka Supply-Side Economics)have failed.

    Here’s my view: a package of changes to fiscal policy, for long term budget sustainability and a stronger economy, should include: deep cuts in military spending, small/moderate cuts in Social Security and Medicare via means-testing, an increase in spending on energy and other basic infrastructure, and much higher taxes on the income and capital gains of the rich.

    Here’s a link to the summary of the Social Security and Medicare Boards of Trustees latest report: http://www.ssa.gov/oact/trsum/index.html

  19. bertly71 says:

    Easy to be generous, when you are spending someone else’s money.

  20. DeDude says:

    @ Winston Munn;

    You are absolutely 100% correct.

    The only reason the GOP are so desperate to get the social programs into this debate is that they have to face the music now that those programs no longer are building up trust funds that can be plundered. Social Security is fine as far out as any economist have ever done an even remotely accurate prediction. Medicare trust fund is a little more problematic but if we start charging medicare taxes on investment income over 100K/year it will be just fine (provided Obama Care stay in place to control cost).

    It is interesting how during the Bush years corporate media talked about national debt without counting the debt to the trust funds. Then after Obama came into office they started using numbers that included the debt to the trust funds. The honest thing is to include the debt to trust funds when you talk national debt. Just peculiar how these so-called liberal media found honesty just as Obama took office so that it looks like he has gotten the number way up there (in 2008 we talked about 8-9 trillion and now we talk 14 trillion with no mention that we have changed from counting apples to counting oranges).

  21. rktbrkr says:

    We as a nation have to make a simple but profound decision : Guns or Butter we can’t continue both without defaulting and/or significantly devaluing. Do we want to maintain a military empire spiderwebbed all over the world chasing rag tag muslim militants, defending the DMZ in Korea, the Fulda gap in Europe, deposing “bad guy” dictators on an ad-hoc basis and dozens of other scenarios? If we do we have to tell our own citizens “sorry we can’t keep our commitments to your needs”, we need to chase & kill militants all around the world, maintain a dozen nuke aircraft groups, develop new planes and weapons because our military/industrial complex tells us we must do it to make you safer.

    Our “peace dividend” has become the undefined “the long war” as presented by our military professionals who will always be able to divine a threat somewhere.

    Instead of playing golf with Boner Obama needs to make a national address and lay out these simple and big decisions so the people can make their interests known to their elected reps – and then come out directly in favor of a major military downsizing to recapture our peace dividend. The alternatives are default/ devaluation or reneging on the social contract the government has made with the tens of millions who have made decades of dedicated tax payments into Social Security and medicare. The alternative is for Obama to address the people and tell them “I know the government has promised you secure retirement and healthcare but we are faced with an emergency where the higher priorities are to continue the “long war” and continue to repay our foreign creditors so Social Security and Medicare and other support payments will be restructured to provide every American with very limited basic survival requirements” .

    Fine tuning the present budget won’t do any more than postpone the date of default/devaluation reckoning, eventually interest rates will rise significantly and it will be all over.

  22. rktbrkr says:

    It’s really simple – do we want the social programs we’ve been paying for decades or do we want to watch drones and special forces taking out bad guys “du jour” on cable TV?

    PS, if we want to have a large active military to play wack a mole with bad guys all over the globe we can’t continue paying a volunteer military market based wages. We need to reintroduce a draft with draftee type pay to continue a worldwide undefined “long war”. So add that to the money saving mix “Im reducing Social Security and medicare to basic survival levels and restoring the draft to pursue the long war, I’m sure all americans young and old will embrace this shared sacrifice to make us safer from all threats all over the world”. There will be no draft exemptions or deferments, all americans reaching age 18 will be assigned to military and non-military assignments with discrimination or preference

  23. DeDude says:


    Now I have to tell you that I agree 100%. What the heck did they put in the coffee this morning?

    I actually think we should institute a mandatory 2 year draft for 18 year olds, but for other reasons. I think that after high school all kids need a brake to mature a little before they decide their future path. I also think that after such a 2 year effort either serving their society in the military or by other forms of activities (inner city schools, national parks, disaster mitigation, etc.), they could be said to have “earned” catastrophic medicare for all, unemployment and other benefits that a civilized society should provide without discussion. If a lot of kids chose 2 years of military service we would simply end up with a large population of well trained soldiers and could have a much smaller standing force to take care of the actual defense of our country.

  24. rktbrkr says:

    DeDude, had an extra scoop of my fresh ground hawaiian blend for Sun morn.

    We have spent a lot of blood and treasure the past 60 years engaged in nearly continuous conflict on behalf of our allies and we’ve gotten precious little assistance from them – witness the “coalition of the willing” in Iraq and the token assistance in Afgan.

    The Soviet Union went bust maintaining a continuous war footing and now it’s decision time for us.

    There are definitely benefits to a universal national service, I think only one congressional member had a son involved in the Bush wars, if a reasonable number of them had some skin in the game they might be more interested in following the constitution when the president wants to send americans into combat without bothering to declare war.

    This financial crisis provides us with an opportunity to refocus our national direction and we shouldn’t squander it, we can be Athens or Sparta.

  25. wunsacon says:

    The cost of the US vs Afghanistan and US vs Iraq

  26. wunsacon says:

    The cost of the “US vs Afghanistan” and “US vs Iraq” wars has not yet been paid out either. We’ll keep paying for it as long as we’re there.

  27. TerryC says:

    Only in 7 of the 31 years of the graph (6 Reagan, 1 Obama) does one party control the house, senate, and white house. So please explain to me how all this debt is the fault of one party and not both of them? I foolishly thought from my government class that all three had to vote for a budget (unless there was a veto override).

  28. The Debt Ceiling serves as a checks and balances measure. It allows a second look at finances on a grossly miscalculated budget(s) or the utter “absence” of an approved (voted) budget as was the current course pursued by the Obama Administration.

    From a macro economics persepective, the actual Debt is not a concern. It is the Debt/GDP & Deficit/GDP “ratios” that guide stakeholders to the health of any economy. In that respect, the long-term prospect for the USA is grossly misunderstood. The January Budget has long term measures that actually improved the two important ratios by keeping them below 100% & 4% over the next three decades.

    If there is to be a downgrade crisis (as opposed to mostly early inconsequential downgrades), I currently gauge it to occur in 2022 upon these ratios turning up more steeply after the 2014 trough event.

    Debt Meter chart: http://trendlines.ca/free/economics/DebtMeterUSA/DebtMeterUSA.htm

  29. DeDude says:

    @ Freddy;

    Thanks for the link to actual data. It is clear that we are not facing any serious problems in the next decade even if we were to take a few years of break from cutting the public sector. Predictions of 22 or 18 trillion sounds catastrophically high until you put them in context as % of predicted GDP. But the raw numbers work when corporate media want to sell its lies about Obama being this free-spending “soc!alist” who will destroy america. I always have been a bit sceptic about any forecast past 10 years, because even the 10 year forecast more often than not turns out to be spectacularly wrong (most recent famous one was new president Bush II and CBO predicting the national debt being payed by 2011).