Tom McGee's Blog

Every now and again I get the opportunity to read The Wall Street Journal’s editorial page (a.k.a., The Funny Pages), where one can almost always find wonderful nuggets of disinformation and illogic. Here’s today’s, from “The Audacity of Debt,” in which the author compares the recent increases in the U.S. budget deficit to those wrought by Reagan’s tax cuts and military spending increases of the early 1980s:

Our view is that there is good and bad public borrowing. In the 1980s federal deficits financed a military buildup that ended the Cold War (leading to an annual peace dividend in the 1990s of 3% of GDP), as well as tax cuts that ended the stagflation of the 1970s and began 25 years of prosperity. Those were high return investments.

Today’s debt has financed … what exactly?

Wait a minute … or perhaps 10-25 years … and we’ll have a better answer. Did anyone really expect to know what the end result of the stimulus package would be after nine months?

A day (or a decade, what’s the difference) wouldn’t be complete without a math error. Comparing Reagan’s $200B annual deficits with this year’s $1.4T deficit, they state that Reagan’s were “about one-quarter as large in real terms as today’s deficit.” Actually, based at least on this calculation, they were more than one-third. Perhaps what they meant was, public debt quadrupled during the Reagan and (first) Bush administrations. Which has the benefit (or deficit, depending on your point of view) of being more-or-less true.