- This graph from my Friday Wall Street Journal article simply presented basic facts about the second Obama budget and compared it with the first Obama budget and with the House budget.
- So why did it attract so much attention here and here and other places? I think it's a sign that people are tired of rhetoric and demagoguery. They want to understand each side’s factual position in the debate. "All we want are the facts, ma'am," as Joe Friday would say. My guess is that people would like it if President Obama or Members of Congress took one or two charts to the town hall meetings or to the Sunday morning talk shows. Sometimes you hear the excuse that charts are too technical, but that certainly doesn’t apply to the techies at the Facebook town hall last Wednesday.
- Still some have asked good questions about how to interpret my chart. Some thought it is misleading to plot government spending as a percent of GDP. But that's not unique to my chart, and in fact it’s pretty conventional. CBO and OMB regularly report spending this way. For example this recent CBO report on the first 2012 Obama budget measures outlays as a share of GDP (See Table 1-2 on page 4). Regarding recent history Table E-2 of this CBO historical data set presents the history of outlays as a share of GDP both before and after the recession. The point of my article is that there was a spending binge and that the binge would continue with the Administration budgets, and I think the chart showed that accurately.
- Here is what my chart looks like if you do not divide spending by GDP. It reminds us that the under the House budget spending continues to grow, but less rapidly than the two Obama budgets. You can still see the spending binge of the past few years but the upward trend makes it harder to visualize.
- Another question is why I did not include zero percent of GDP in scale of the chart. I teach Economics 1 students at Stanford to look at the scale of axes carefully, but I do not think it is misleading to choose the scale I did. If you are interested in what is happening to the stock market in the past few months, you do not plot the S&P 500 with a chart that includes zero. If you did you would not see much of anything on a day to day basis. For the record here is a version of my budget chart which includes zero. The story is the same, but the ups and downs are scaled down and are harder to see.
Sunday, April 24, 2011
On the Budget Debate People Are Saying “All We Want Are the Facts”
Posted by John B. Taylor at 10:36 PM