Belatedly, it occurred to me that it could be more useful to see the progress of the debt burden in terms of national earnings. This is from Steve McGourty and is updated as of 21st September.I'm not sure how much comfort we can take from the fact that the blue line was slightly higher in the mid-1990s, and far higher in the '40s. I suppose it depends on what you think may happen to the GDP part.
8 comments:
Hold on - debt is a sum of money but GDP is an annual sum of money. The use of "per annum" is arbitrary - if you repoorted GDP per decade instead, it would all look much better. "Per century", "per millenium".... there's lots of scope.
I'm only the messenger on this one, DM, but I think the graph is useful in that it gives an indication of the relation of the debt burden to income.
But surely, looking at the period covered by this graph, GDP just does not cover the debt incurred by the Bush administration?
Mr Micawber's famous dictum comes to mind. Looks like far too much 20shillings and 6pence spending going on.
Hi, Deb: the red line is debt in dollar terms(left hand scale), rising as ever, but the blue line is debt as a proportion of GDP (right hand scale).
As a percentage of GDP, debt has risen since Dubya came in, but because the economy "boomed", the rise relative to the size of the economy was modest.
The bit that looks implausible to me is the projection for the next few years: if the economy shrinks or virtually stands still, while debt rises significantly, I'd expect to see the blue line climb.
At least the US government gives you the information to make these judgments - where is the equivalent easily-accessible information for the UK?
Ah, thank you...I'm getting it now. I'd overlooked the %age factor. I can certainly see what you mean.
It's important to be able to see these figures and projections - and grapple with them! High Economics/finance is not my thing (you didn't guess??) but I came across a very interesting and readable assessment of the economics behind the EU and UK the other day. The figures were laid out very clearly. It was published by Civitas, an independent think tank. I wonder if they have anything like this for UK finances? Because we can be sure that our gvt will not make it so easy for us (ok, me!) to understand.
Hi, Deb. I agree: the UK government does not seem to try as hard as the US to explain or give easy access to the most useful information. Could you supply the link to the Civitas asessment?
Hello S - here's the link to Ian Milne's 'A Cost Too Far?'
http://www.civitas.org.uk/pdf/cs37.pdf
Thnaks, Deb, will have a look.
Post a Comment