Archive for national debt

Romney Tax Day Infographic

The Romney team just released an infographic comparing the federal budget to a household budget. Replicated below:

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I wanted to give an informal critique of this infographic. I honestly believe creating infographics is a form of art and that we need to give deep and careful consideration to all aspects of this art.

who is the target audience?

What they should want out of this infographic is to have the viewer see themselves in the family budget. They should be targeting a) people who are independents and b) people who might care about the federal budget.

I’m going to go out on a limb and say that the average family of four making under $25K a year doesn’t give a crap about the federal deficit. And complaining about it to them is probably not the best tactic to win their vote.

make the numbers mean something to the audience

On a quick look, the median income for a family of four in the US is about $67K. This is going to be a number people are a little more familiar with. People who do care about the deficit are going to look at the numbers in the infographic and feel a certain disconnect because the income is so far away from what they are familiar with.

When a typical man or woman supporting a family of four sees this infographic, they will start this train of thought:

“Well, if I had an income of $24,686, we’d have to move to another house. Gosh, where would we go? Probably rent somewhere, it would have to be under $700 a month. We’d have to sell a car and the kids… wow, we’d have to cancel most of their activities. Would I even be able to afford my iPhone? I’m under contract for another year, so I’d have to wait that out but I don’t think I can function properly without a smartphone…”

Can you see what they’re not thinking about?

THE FEDERAL BUDGET!

Instead, they should have realized that you want the audience to slip easily into the role of the family. To this end, recalculate all the numbers for a median family of 4. I’ve done it here:

Family income – $65,500

Family spending – $100,708

New Debt – $35,208

Total Debt – $434,081

Note: My first calculation was for $65,000, but I saw that this number brought the “spending” number to just  to just under $100,000, which is an psychologically important hump. So I bumped the income up another $500 to hit that psychological mark. These kinds of details should be in the mind of every infographic creator.

These numbers are going to target an audience that cares about the topic at hand, and ultimately make more of the impact we want.

the graphic is not “share-sized”

What you see above is only 25% the size of the original. The original version of this thing is a half megabyte and comes in at 2112 x 3731 resolution. Holy cow.

Everyone knows the new iPad has a monster resolution, right? Here’s how this graphic would look at full resolution on a new retina-display iPad.

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And on an iPad 2

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A lot of viewing these days is done on mobile devices with screen sizes much smaller than an iPad 2. By having such a monster infographic, we’ve cut our potential viewing audience way down.

And they have no options for sharing it at a smaller size. There is a link to “download and print” it, but who is going to do that? Infographics are seen online. If you’re going to print them, fit them onto an 8 x 11 piece of paper. This infographic does neither.

I’m glad the Romney team has made infographics a part of their media platform. But they have a long way to go to create infographics that make the kind of impact that they potentially can make.

The 2012 National Debt Road Trip

Back in 2009 I made a visualization about the deficits we were expecting under President Barack Obama. I called it the “National Debt Road Trip” and it was moderately popular.

Today, after nearly 3 years, I have updated it with a new video:

The video itself is just an overview of data that I’ve been toying around with for a month or so. I’ll do an in depth look at the data first and then answer some questions close observers might have about the data.

The National Debt Road Trip Details

The debt data has been collected from Treasury Direct website and adjusted for inflation using the Bureau of Labor Statistics CPI data. For the future debt, I used the debt projection for 2016 from President Obama’s 2013 budget (Historical Tables, Table 7.1 – Federal Debt at the End of the Year).

For the presidents where I had daily debt data (from 1993 – present), I used “inauguration-to-inauguration” debt numbers.

When I didn’t have those (for Ronald Reagan & George H W Bush) I used the yearly debt numbers including the fiscal year for which they were responsible. So for Reagan I used October 1981-October 1989 and for HW Bush I used October 1989 to Jan 20, 1993 (when daily data became available).

With all this information, I came up w/ the following data points (adjusted for inflation)

Ronald Reagan debt
from $2.29 trillion  to $4.82 trillion
$2.53 trillion increase over 8 years
$316 billion / year

George H W Bush debt
from $4.82 trillion to $6.54 trillion
$1.72 trillion increase over 4 years
$430 billion / year

Bill Clinton debt
from $6.54 trillion to $7.38 trillion
$0.84 trillion increase over 8 years
$105 billion / year

George W Bush debt
from $7.38 trillion to $11.17 trillion
$3.79 trillion increase over 8 years
$474 billion / year

Barack Obama (measured) debt
from $11.17 trillion to $15.57 trillion (March 21)
$4.40 trillion increase over 3 years, 2 months
$1,390 billion / year

Barack Obama (future projection) debt
from $15.57 trillion to $20.39 trillion
$4.7 trillion increase over 4 years, 10 months
$995 billion / year

It was then a simple matter to apply the $5.8 billion-per-mile, 1 hour-per-year calculation to get what you see in the video.

What I Assume Will Be Frequently Asked Questions

Q: I ran your numbers and you’re wrong! Bush increased the debt by $4.9 trillion, not $3.8 trillion.

A: Did you adjust for inflation? (Hint: No, you did not.)

Q: Why are your numbers different here than they were in your original video?

A: Back in 2009, I was new to researching federal financial data. I used a different, less accurate method of inflation calculation for my first video. Additionally, the inflation data of the last 3 years ended up altering where George W. Bush “stopped” in debt accrual. Finally, I tried to be all fancy in my calculations last time, making estimations to calculate debt between fiscal years. I didn’t do that this time so, while the numbers are in the same ballpark as the first video, I believe them to be a more accurate representation.

Q: You said “during the first 38 months of his presidency” but you crossed out 39 months. Why?

A: Good eye. At that point in the video I was disregarding debt accrued from January 20, 2009 to March 21, 2012. That is almost exactly a 38 month period, but I crossed out two partial months (January 2009 and March 2012) for the sake of simplicity.

Q: Why use “inauguration-to-inauguration” data instead of “fiscal-year-to-fiscal-year”? In short, why did you assign President Obama the debt from 2009? That was a budget Bush signed, he should be blamed for the debt.

A: Normally, I would agree on this count. However, President Obama’s stimulus deeply complicates the matter. Federal spending for 2009 was drastically higher than the budget that was passed due to the Obama stimulus. Add to that the sizable tax credits from the stimulus and we see President Obama’s policies have significant effect on both the revenue and the spending side. I felt that doing calculations based on assumptions of what could have happened would be presumptuous and call the data into question. So instead I tried to use numbers that could be easily fact-checked.

Q: I have a chart here that *proves* George W. Bush is responsible for all this debt. Why do you hate the truth?

A: That’s less of a question and more of a pout, but here is my position: I’ve seen that chart and I’m of two minds about it. On the one hand, yes, Bush implemented a lot of policies that racked up a lot of debt. On the other hand, Obama has been in office an awful long time to not be held accountable for the state of federal finances. That is why I separated out “before” and “after” into two different speeds.

I think it is a totally valid question to ask “Now that the economy has turned around why haven’t federal finances?” Is Barack Obama the only president in the history of ever to not be held responsible for anything that happened during his presidency? It seems rather insulting to President Obama to imply he is so ineffectual that, even after 3+ years in office, he is merely a figurehead doll swept along the current of a river he cannot control. (Worst. Metaphor. Ever.)

Q: Why didn’t you use debt as a % of GDP?

A: A couple reasons. The first is that doing so really complicates the metaphor I’m using. Secondly, it would actually put President Obama at a disadvantage because debt as a % of GDP spiked drastically in his first year since not only did the debt increase, but the GDP decreased increasing the number from the numerator and the denominator side of the ratio. Thirdly, while the president doesn’t have total control over the deficit, he has far more control over it than over GDP increases or decreases. Using “debt as a % of GDP” is a less direct measurement of presidential responsibility.

Q: What do you mean by “optimistic revenue estimates”?

A: According to President Obama’s own budget, he expects 2014 revenue to be 43% higher than 2011 revenue. The only time in modern fiscal history that this has happened was when inflation was in the double digits, so the increase in revenue wasn’t a real increase. He’s already way off target for his 2012 revenue estimates, so I don’t think it’s a stretch to say these are “optimistic revenue estimates”.

In my video I wanted to give President Obama the benefit of the doubt. I wanted to say “Even though I think you’re being overly optimistic, we will use your numbers as an act of good faith.” The horrifying thing is that, even with President Obama’s extreme optimism on the revenue side of the equation, he still projects monster deficits long into the future.

The big point here is that President Obama has no plan to deal with deficits or debt. He’s kinda-sorta hoping that we’ll start making enough revenue to catch up to the spending increases, but he kinda-sorta knows that isn’t going to happen. Yet he has made no moves to reduce spending to match (or even come within screaming distance of) federal revenues.

And I think that is a problem.

Congrats to Know-Y Winner Stephen Byrd

In January, I entered the Y-Care video contest initiated by Know-Y.org, creating a video meant to raise awareness of the National Debt. My video was chosen as one of the five finalists. The final winner, Stephen Byrd, was announced today.

Congrats to Stephen on his win! Here is his video:

And, because I really liked my video, here it is again:

Thanks to everyone who voted!

The Federal Deficit: A Spending AND Revenue Problem

The past couple days, I’ve been railing against the tax/benefits compromise on Twitter and getting a lot of push-back from the right side of the Twitter-verse. The argument goes something like this:

“The deficit is due to the fact that we’re spending too much, not because we’re not pulling in enough revenue. We have a spending problem, not a revenue problem.”

In response to this, I’d like to submit the following into evidence. It is a graph of the federal receipts and federal spending since 1980, taken from the monthly treasury report, which is as non-partisan a source as possible. The gap between the red line and the green line is the deficit.

Technical note: The data here is inflation adjusted by month and represents a rolling 12 month sum. So, for example, the point for October, 2010 (the latest data point) is a sum of the previous 12 months of receipts and outlays, all adjusted for inflation. This is necessary due to the fact that the treasury reports fluctuate drastically from month to month… especially in April, for obvious reasons.

So, what can we learn from this chart?

  1. our current deficit is driven by BOTH a dramatic increase in spending and a devastating decline in revenue.
  2. the Bush tax cuts are not wholly to blame for the deficit. If revenue had held steady at 2007 levels, we’d still be looking at record deficits based only on the spending increases.
  3. spending increases are not wholly to blame for the deficit. If spending had held steady at 2007 levels, we’d still be looking at record deficits.
  4. compared to revenue, spending is relatively stable, increasing more or less steadily year after year.

That last one indicated to me that the federal government has more control over spending then they have over revenue. Because of this (in my humble opinion) it does make more sense to try to cut spending than to raise taxes, since we have more control over the spending side.

However, we need to look at the situation practically. We can’t possibly cut enough out of the federal budget to balance it without additional revenue. Those kinds of budget cuts are not even remotely feasible politically. I’ve little interest in playing fantasy politics where we magically get rid of a fourth of the government without people lighting their Congressmen on fire.We have about enough revenue to balance a budget from 10 years ago.

The rebuttal, of course is that raising taxes will slow economic growth, which will drive revenue down anyway. I believe there is some merit to this, but does that mean we’re going to just tolerate insane deficits while we wait patiently for the economy to improve?

There is no way to have our cake and eat it too. Lower taxes is quickly becoming a luxury of a country whose financial situation is not dire. If we want to close the deficit, we need more revenue and less spending. Period. Full stop.

7 Nasty Liberal Lies about 8 Nasty Conservative Lies

This is a response to the Alternet article 8 Nasty Conservative Lies About the Democrats and Obama That Must Be Debunked Before the Election which is about as unbiased as one would expect from the title.

Oh, this is so boring. But smart people I know have been suckered in by it, so I suppose it needs to be rebutted. How tedious.

1) President Obama actually reduced the deficit since George Bush’s last deficit was $1.416 trillion.

In a sleight of hand worthy of a 7-year-old magician wannabe, he notes that, since Bush signed the 2009 budget, he is therefore responsible for all the debt in 2009, which was $1.416 trillion. He does not, however, explain that the stimulus was passed that year and added drastically to the deficit for 2009. Why is there no mention this? Because the author is interested only in political point-scoring, not the truth.

2) Obama actually cut taxes

This one is actually true. President Obama did cut taxes as a part of the stimulus. But apparently those tax cuts had no effect on the deficit described above, being replaced by money from the happiness rainbow tree that the author believes Obama keeps in the back yard. It is entertaining that the author says these tax cuts were “wasted” since he will soon cite the CBO report on the stimulus, which claims that the tax cuts helped stimulate growth. Consistency is apparently not as much fun as throwing poo.

3) President Obama didn’t bail out the banks, George Bush did.

True, but Obama did vote for the bailout, as did John McCain. Perhaps he is claiming that Senators aren’t important and shouldn’t be held responsible for their own actions and that Congress has virtually nothing to do with governing the nation, in which case the whole article seems irrelevant since it’s not a presidential election and changing Congress won’t actually have an effect on anything. It’s hard to tell, he’s short on details.

4) The stimulus totally worked

He cites the CBO report on the stimulus. Whoop-de-do. The CBO report is an estimate based on an algorithm. When the Obama administration went to the CBO before the stimulus, the CBO plugged the numbers into a computer and said “If you spend X money, you will get Y jobs”. Nearly 2 years later, the Obama administration asked the CBO to plug the numbers in again and – surprise! – they got the same result. It is not based on any actual measurement of the job market, it’s based on a model.

A better way of determining if the stimulus worked would be to ask “Did we follow the unemployment curve the administration said we would?” The answer is “hell no”. Unemployment is far worse than the administration predicted with the stimulus. This is a point which the author explains at length. I’m just kidding; he totally ignores it, perhaps imagining that he had addressed it but could no longer make out the words from behind the spittle covering his laptop screen.

5) Businesses don’t hire based on tax cuts

Young, small businesses hire more than big businesses. They will usually work the people they have as much as possible until it becomes clear that they cannot pull in any more business without new people. Fewer taxes means more money. More money could simply mean more profit (as it has recently with larger companies), or it could mean more growth, more employees, even more money. It varies from business to business. But saying “it’s complicated” does not give the author the intellectual political anger management outlet he clearly needs, so I guess we should be glad he’s not biting anyone’s fingers off.

6) Health care reform reduces gov’t deficits

Here, he cites an article from before the health care reform bill was passed. Since then, the estimate has jumped up as things like the 21% cut in Medicare reimbursement was postponed, then postponed again and large companies like McDonald’s got permission to ignore the law when they told the government that they would drop coverage for their employees if they didn’t get a waiver.

Thus, the various cost-savings of the bill have been shown implausible or manipulative (which is exactly what I said would happen to those absurd estimates nearly a year ago). They were nothing but projection manipulation devices and anyone who wasn’t drunk could see that was the case.

7) Social Security is fine. It’s not a Ponzi scheme.

Yes, Social Security has run a surplus… up to this year when it ran a decifit. Projections have it pushing back into surplus for a couple years until, in 2016, it dips back into deficit forever. “No problem,” the increasingly dense author of the article says, “There’s a trust fund”. Yeah… a trust fund held in US debt. The SS trust fund buys up US debt, which the government pays back regularly, so it’s a pretty safe asset. That trust fund should last for a while, but eventually we will be paying Social Security returns to older investors (the elderly) from their own money or money paid by newer investors (the younger generation).

That is the definition of a Ponzi scheme.

8 ) Government spending is good for the economy

Here the author talks about how the government spends so much on infrastructure, roads, airports, schools (in an ideal world these things are all good for the economy) but only a “small part of the government’s budget” is for welfare and foreign aid. I’m kind of funny inasmuch as I think that 60% of our budget is not a “small part”. (I’m counting SS, Medicare/Medicaid, Health and Human Services, Housing and Urban Development, and “other” mandatory programs. But not interest on the debt.)

Roads and schools? (Transportation and Education) They account for 3.3% of the budget. Since welfare and foreign aid are such a “small part” of the budget, the author won’t mind if we get rid of it. I’d be delighted if we reduced the other parts of the budget so that Transportation and Education made the bulk of it.

Overall, the author targets builds up conservative strawmen of “lies” and then uses liberal strawmen (and selective data) to “prove” them wrong. This article is nothing more than red meat for people who already agree and don’t have time to do the research themselves. It’s sloppy, lazy, angry and impotent. And, worst of all, it spreads disinformation. Hopefully this post is something of an antidote.

(Note: There are few links here because this data is so easily available and I’m in a crunch time at work.)

What Does the Federal Budget Freeze Look Like?

The first part of this post is just an overview of the data I used to make this video, so if you don’t care about that, you can skip over it to the part where I talk about what the budget freeze means.

First, I’ve got a new video up called “What Does The Federal Budget Freeze Look Like?”

Here is the data summary of this video:

I got the budget numbers (budget, discretionary, mandatory) from the overview of the 2010 budget which includes projections for 2011. I did this because the 2011 budget is not available yet (although I understand that those projections are a bit low and the real budget will be bigger than the projection).

That gives us the following numbers:

  • 2011 Federal Budget – $3.7 trillion
  • Mandatory portion of federal budget – $2.322 trillion
  • Discretionary portion of federal budget – $1,380 trillion

I’ve seen it consistently reported that the freeze will affect $447 billion of the budget, although I imagine that number is subject to change. The amount saved from this freeze has been consistently reported as $15 billion in the first year and $250 billion over 10 years.

The stimulus funds as reported by recovery.gov at the time of this post are:

That leaves:

  • $195 billion in tax cuts that have not been applied
  • $202 billion in contracts, grants and loans that haven’t been spent
  • $121 billion in entitlements (what a creepy name) that haven’t been spent

If we left the tax cuts in place, but canceled the rest of the spending, we’d save $323 billion… which is a shade less than what I said in the video. Apparently, that is the result of some rounding errors in my spreadsheet, but the $4 billion comes out to about one and a half teaspoons, which isn’t enough to make a difference in the visualization.

As for the water part of it… If we assume that the budget is 192 ounces of water that we’ve split into 4 oz cups, then all the math in the video works out. I actually under-counted the unspent stimulus (it would be 17 ounces instead of 16). I measured my ice cube tray and found that each ice cube was 1.5 ounces and I used 1 and a half tablespoons of water to measure out the .75 ounces that would be equivalent to $15 billion.

<End of Boring Math Things>

OK… now to comment on what I think about the budget freeze to anyone who cares what I actually think.

First of all, I hate the “we’re saving $250 billion over 10 years” line. It is a piece of crass political rhetoric and I’m disappointed that the administration would use it. If they actually implement a three year freeze on the portion of the budget they’re talking about (which is a big if, but let’s assume the best), why measure the effects in the space of 10 years?

The answer is “To make the freeze look bigger”. They’re basically just basing the extended savings off of projected interest payments and “savings” due to the fact that the baseline on that portion of the budget hasn’t moved. It is setting a dangerous data precedent where politicians realize that all they have to do is calculate a projection out as far as they need in order to get the numbers they want. It would be like giving an employee a $5,000 bonus, but saying that you gave them a $8,000 bonus based on a 5% return of that investment over the course of 10 years.  They might as well say that they’re saving a trillion dollars over the next 25 years or a hundred trillion over the next 300 years. It is a data statement designed to trick people.

Second, I hate the “We’re saving all this money by not spending it” line because it is similarly political. If a future politician wants to play this stupid numbers game, all they have to do is “project” that they will spend like a crazy person next year and when the next year comes, they decided to spend like a half crazy person. Then they can claim that they have “saved” all this money because they “reduced” their projected spending.

As a slapdash example, a politician could project that they will increase spending by 5% next year and then decide at the last moment to increase it by 3%. They could then spin that decision to increase by a smaller amount as a decision to “cut” their spending (which wasn’t real spending, only projected spending) by 2%.

Last, my attempt to visualize the scale of the budget freeze does not mean I don’t support it. I really like to see cuts to the budget and I personally think this is not an insignificant one.I think it is worth our energy to do exactly what the Obama administration seems to be doing…freezing increases and looking around for crappy programs to cut.

Keep in mind the hypocrisy on both sides of the aisle. The Republicans are hypocrites for claiming that this is a totally inconsequential budget cut. In 2005, George W. Bush proposed a 1% cut (not a freeze, a cut) in discretionary spending that wasn’t Department of Defense or Homeland Security. Translated to today, Bush’s cuts would have “saved” $33 billion using the calculation metric for the current freeze; more than twice the amount that this freeze would save us. At the time, John McCain called it a “very austere budget” and Dick Cheney went out pushing their credentials as cost cutters. I find it strange that they were ecstatic about saving the equivalent of $33 billion but think that $15 billion is a drop in a bucket.

Of course the Democrats blasted Bush’s cuts as a gimmick too small to make a difference, but seem to have lost much of their skepticism over these new, smaller “cuts”.

Overall, it looks like both sides are more interested in political gain than in having a frank discussion about the numbers and what they mean. This should surprise no one, but I confess to finding myself somewhat dismayed that the Obama administration, for all their hype about being pro-science and pro-data, has no problem spinning the numbers in a way that decreases clear comprehension in order to increase message potency.

How Big is $9 Trillion? – Willful Omissions From Paul Krugman

You may have seen the Paul Krugman post “How Big is $9 Trillion” in which he attempts to defend the Obama administration’s recent announcement that they expect that their policies will increase the national debt by $9 trillion. His tack is to “explain” that $9 trillion isn’t really all that much when you understand it in context.

it’s being treated as an inconceivable sum, far beyond anything that could possibly be handled. And it isn’t.

What you have to bear in mind is that the economy — and hence the federal tax base — is enormous, too. Right now GDP is around $14 trillion. If economic growth averages 2.5% a year, which has been the norm, and inflation is 2% a year, which is the target (and which the bond market seems to believe), GDP will be around $22 trillion a decade from now. So we’re talking about adding debt that’s equal to around 40% of GDP.

Right now, federal debt is about 50% of GDP. So even if we do run these deficits, federal debt as a share of GDP will be substantially less than it was at the end of World War II.

I defer to Paul Krugman on a lot of things because he is transparently smarter than I am. But it is precisely because of this fact that I know he is conscious of the obvious reasons his analysis is hogwash.

First of all, the national debt in WWII was initiated by an existential threat to the very continuation of our country. Mr. Krugman does not make even attempt to make the case that we have a similar crisis that justifies this kind of debt.

Second, implicit in his observation is the concept that since we did fine after WWII, we’ll do fine now. But the years after WWII saw drastic reductions in the inflation-adjusted debt driven by drastic reductions in spending. Mr. Krugman points to no similar possibility in the post-Obama world.

Third, we have something now that we didn’t have in the 1940′s. Back in the 1945, at the height of the spending that saw our national debt rise so dramatically, entitlement spending and interest on the national debt made up a meager 5% of our total budget.

By the end of President Obama’s term (if he runs two terms) we’ll be looking at a federal budget that is 70% mandatory spending. (I assume for the purposes of consistency that mandatory spending includes interest on the national debt because we don’t really have a choice in not paying it.)

Here’s a quick visual of the difference in the budgets in 1945 and 2016. (Ugly, because I did it fast… I’m on vacation.)

1945 vs 2016

If you look at the 1945 budget with the single question “How are we going to reduce our debt?” you can identify the major problem. It’s the defense budget, which is almost 90% of the budget. Interestingly, reducing the defense budget is exactly what we did in order to reduce the debt, cutting it over 80% in 3 years (it helped that we won the war).

As a contrast, President Obama’s solution to reducing overall spending is… well, I don’t think he really has a plan. His projected budget in 2016 has reduced the defense budget as a percentage of the overall budget from 20% to 14%, but military spending isn’t what is killing us. The president has no plans to reduce mandatory spending whatsoever. In fact, his only change to entitlement spending is to increase it.

My problem with Mr. Krugman’s “How big is $9 trillion?” is that he is aware of all the problems I pointed out. He didn’t explain how much $9 trillion is; he obfuscated it. By comparing the debt load in the heart of a world-shaking war to a debt load that was accumulated in (relative) peacetime, he has misled his readers to the real significance of the data.

(By the way… if you would like to blame the debt load on the Iraq war, you should know that those costs have raised our debt by 5% of the GDP. Comparing this to WWII, which raised our debt by 70% of the GDP, is a pretty weak argument.)

The National Debt Road Trip – Debt-To-GDP

I’ve gotten a number of people asking some permutation of the following question:

“Why don’t you give the national debt as a percentage of the GDP as a whole? Isn’t that more meaningful/relevant?”

My answer the the latter question is “Yes and no.”

The answer is “Yes”… in the sense that if you made $50,000 per year and you had $80,000 in debt, you’re more screwed than if you make $100,000 per year and you have $80,000 in debt.

But the answer is “No” for the purposes of making a visualization for the following reasons.

First, I didn’t frame the debt in that way is because it fundamentally hides some really important things that shouldn’t be hidden. I’ll go ahead and give the game away… I’m in the business of communicating numbers clearly. And using the debt-to-GDP ration feels too much like trying to hide the real meaning of the numbers.

It feels like a car salesman who refuses to talk about the raw numbers of the car you’re buying because when he talks about monthly payments, it’s easier to screw you. Because, really, what’s the difference between $287.87 per month and $359.60? It’s not that much, is it? And if you’re already spending $300, you might as well spend $350, right?

In the same way, talking about the debt in a percentage manner is hiding the true cost. So we increase the debt-to-GDP by 2.2%… big deal, right?

But that 2.2% is the same amount as everyone in the state of Washington makes in a year. Every. Single. Person. Go look at a Google street view of Seattle and try to count how many people live in a high-rise apartment building. Take a stroll down some of the swankier neighborhoods. Look at the obscenely expensive houses that line the bay. Everything every one of those people makes in a year. The more thought you apply to the real meaning of the number, the more you see that, while 2.2% might be an accurate number to describe an increase, it doesn’t even begin to communicate the scope.

That’s the first reason I didn’t use debt-to-GDP… becuase it violates the core principle of what I’m trying to do: give a clear understanding of the scope of the issue. When people use it, it feels like they’re looking around for the best possible way to represent the problem so that it doesn’t feel as big as it is.

Make no mistake, the problem is huge. Huge in a way almost none of us understand because our brains don’t process that kind of huge very well.

There are other problems with framing the issue this way too. One is that comparing the federal debt to the GDP is something of a misnomer because the government doesn’t own the GDP. The GDP is “owned” in part by everyone in the country. And all those people and business have their own debt (mortgages, credit card debt, student loans, business loans).

Quick, off-the-cuff example using very rough numbers: Sam makes $100,000 per year, but he spending $150,000 per year. As if that weren’t bad enough, he is $500,000 in debt already. But he tells himself it’s not a big deal because his kid is in college and that will only last a couple years and, besides, he has a business protecting houses and mowing yards for a living and if you combine everything his clients make in a year, it comes out to be almost  $750,000 per year.

So if you look at how much he owes compared to how much his clients make, it’s only about 70%. And if his clients make $1,000,000 next year, he could owe $666,000 and there would be no change whatsoever in his “how-much-I-owe to how-much-my-clients-make” ratio. No problem!

Except that Sam’s clients are probably a little nervous about Sam comparing the truly absurd scope of his debt to the amount of money they make every year. Shouldn’t he be comparing his debt to the money he makes every year?

I could go on at length, and perhaps I’ll make a visualization about this, but right now I’ve got to work the day job.