Get ready, because I am about to use a concept from Basic Calculus to reveal to you Americans out there a lie that you’ve been taught to believe - almost all of you. No matter which party you support, you “know” one thing about their attitudes and behavior... how Republicans and Democrats differ toward deficit spending. Alas, what you "know" is exactly opposite to what is true.
Let’s start with the fact that the U.S. posted a $130 billion budget deficit in May and the smallest shortfall for the first eight months of a fiscal year since 2008, as a stronger economy and rising employment bolster revenue. This trend reiterates a core difference between the two major U.S. political parties, when it comes to federal budgetary responsibility.
Okay, here it is:
The crucial 2nd derivative of debt… the pace at which the rate-of-change of the federal deficit is itself changing… either moving toward fiscal disaster or away from it… has been positive (toward accelerating debt) during almost every year of every Republican administration since Eisenhower.
In stark and dramatic contrast - that crucial metric is always negative (deceleration) every year of every Democratic administration.
Let that sink in, because it is diametrically opposite to the rhetoric and propaganda and fulminations that have become accepted “truthy” notions in our minds. So? Are you a slave of truisms? Or are you capable of noticing facts that stare you in the face, and are nearly always true?
Why is the 2nd derivative more valid than - say - looking at the simple size of this year’s budget deficit? Because our fiscal situation carries momentum from actions taken three or five years ago, even a decade. Stepping on the brakes does not instantly stop your hurtling car — it decelerates your rush toward that cliff. The 2nd derivative tells you - almost instantly - whether an administration is at least trying to be fiscally responsible.
Let’s examine the 2nd derivative of debt in action. Have a look at this chart of the US federal deficit as a fraction of the nation’s GDP. Wherever the curve is seen to be turning, go ahead and guesstimate a rough CENTER to that stretch of curve. Of course things are bumpy, so a little subjective smoothing is called for, shrugging off blips. But if, across any 3 to five year span, the center point of your curve lies ABOVE, then the nation’s debt is on a worsening track.
If the center of the curve is BELOW, then there's an improving trend, decelerating an arterial hemorrhage, so that it starts to curve back down, or even moving toward surplus. Think convex versus concave.
Now recall that GOP administrations began in 1969, 1981, 1989 and 2001. Democratic administrations began in 1977, 1993 and 2009. Now go draw your curves, find those center points. It truly is amazing!
Let me reiterate. The rate of rate of change of debt is positive (toward reckless debt) during almost every year of every Republican administration (post Eisenhower). It is negative (building momentum toward prudence) in every year of every democratic administration, (post Johnson).
Now add in this bald-faced fact. That Bush Administration accounting tricks deliberately kept the costs of the Afghanistan and Iraq Wars “off the books” for half a decade, letting them finally slam the formal deficit just when economic mismanagement sent the economy into hell, leaving behind a mess that included hyper-velocity debt. In other words, the 2006-2007 “dip” is a lie.
Likewise “Congress controls the purse strings” is a silly excuse. The GOP controlled Congress both for 6 years before Bill Clinton left office and for 6 years after. Yet the 2nd Derivative was negative in the first six and swung sharply positive the very instant a GOP president replaced him, and Clinton could no longer veto the annual Supply Side Voodoo Economics Bill, opening our arteries to the (non) "job-creator caste."
This is not just overwhelming, this rule correlates so perfectly that it seems almost at the level of physical law. Hence, any “fiscal conservative” who supports the GOP - no matter what the rationalization - would have to be either stupid or out of his cotton-pickin’ mind.
== Perspective time ==
I am libertarian enough to want budgets that are relatively balanced. Yes, a small amount of deficit spending is harmless and probably stimulating, especially if spent on national underpinnings like children and infrastructure. A moderate amount can be written off by tipping the scales toward slight inflation. Still, most economists think that a combined national/corporate/personal debt greater than 300% of GDP is in a Problem Zone, and I don't disagree.
On the other hand, we have already seen how bizarre it is for the American right to fetish on debt, when every post-Eisenhower GOP president sent deficits skyrocketing and every demo prez fought them back under control.
But is the United States an especially spendthrift and debtor nation? Look at this chart and you decide. It's possible... just possible... that there are other matters that deserve equal footing on our national agenda. Like problem solving and becoming a scientific and advanced nation again.
And putting people to work preventing 60,000 defective bridges from falling down.
== The underlying agenda? ==
In fact, the current U.S. budget shortfall would be well in the safe zone, were it not for the lingering Bush tax cuts for the uber-rich (and residual effects from Bushite wars). It would be one thing if Supply Side assurances (“the cuts will pay for themselves as job-creators invest!”) ever came true… even once, in the decades since the Laffer Cult sprouted. But that voodoo never came true. Ever. Not one prediction. Even once. But it is still pushed. Wonder why?
== The oligarchs step up ==
In what might have been a scene taken from the pages of EXISTENCE, 250 individuals flew into London for a conclave of the world's richest people and estates, with the formal agenda of preventing revolution by making capitalist societies more inclusive. Their combined assets, estimated at $30 trillion — amount to roughly one-third of the total investable wealth in the world. If money is power, then this is the most powerful group of people ever to focus on income inequality.
The titans of commerce and finance didn't necessarily fly to this meeting in London out of a sense of ethics or moral duty, though that may be a motivation for some. For many, says conference organizer Lynn Forester de Rothschild, it's a sense of self-preservation. Capitalism appears to be under siege. "It's true that the business of business is not to solve society's problems," she says. "But it is really dangerous for business when business is viewed as one of society's problems. And that is where we are today."
Question: were there meetings behind the open meetings, as I depict in fiction? Well? Do any of YOU out there, reading this, happen to know?
Here’s the deal. These are the good billionaires! Here’s another secret confab, one that is endearingly free of any “help the world” rationalizations: Secret Summit: 24 Hours with the Koch Brothers.
== Ah, statistics… ==
Okay. If you can’t beat em…
Drugs, prostitution and smuggling (ie Hookers & Blow) will be part of Italy’s GDP as of 2014, and prior-year figures will be adjusted to reflect the change in methodology, the Istat national statistics office said today. The revision was made to comply with European Union rules, it said.
== And finally, the Big Lie propaganda about the American Revolution ==
Said Ben Franklin: Note I have removed the Franklin "quotation" of dubious provenance. Still, the cited article is interesting.
The notion that the American Revolution was somehow against “government” and “taxation” in general, and not - as all the Founders said - against oligarchy and rule by monopolists and feudal lords - is among the most hilarious conflations and orwellian propaganda campaigns of our lifetimes.