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Comments

Adam

In your recreation, why have such a freakish y-axis? Each successive president appears higher than the last, but that's just because the y-axis keeps looping. There could be a gap or a hard line at the resets of the axis. Or they could be at the same vertical level, then make it a small multiples design? In any case, I find the recreation much harder to read than the original, although I also found myself swapping the meaning of colored/gray lines in the original.

Ken

I have seen a graph for Australia similar to what Adam suggests and it works well.

What these actually show is a major problem with economic forecasting. When there are debt fuelled asset bubbles, growth is strong and deficits decrease. What economists have been doing is projecting that forward, ignoring the problems with increasing levels of debt, so it is all a bit of a surprise to them when it ends. At the moment US asset prices are fairly stable and that is already feeding into the economy, so the assumption is a fairly stable deficit. They will drop and then deficits will be much larger than predicted.

Kaiser

Adam: Good observation. Originally, I did a side-by-side plot. And then I noticed some issues with the data, namely, the projection time window extends beyond the tenure of each president, in both directions. It is possible to do a side-by-side plot if one spends the time to rationalize the time windows first but I decided not to pursue that.

Ken: Sounds like these projections need to have controlling variables.

Edward Carney

The actual data take on an interesting perspective when viewed over the longer term, as in this figure from the St. Louis Fed. On inauguration day, Barack Obama inherited the largest Debt-to-GDP ratio (-9.8) since the U.S. was a bit over a year into its participation in World War II (-26.9). It was also bigger than the lowest point in the Great Depression (-5.4).

President Obama has also presided over the largest deficit reduction since WWII (nearly 7.4%; Bill Clinton's reduction was 6.7%). Obviously, nothing beats the post-WWII recovery for vastness and steepness (30.2% in five years).

Ken

Kaiser: Yes, it is fairly pointless to talk about the great things that are happening with the deficit while private debt is going out of control. How to correct is a more difficult problem. Probably what is better is to put limits on what reserve banks can do.

Edward: These figures are meaningless when looked at in terms of why they happened. Clinton's was achieved through Greenspan's low interest policies leading to the dotcom bubble. Bush was elected when the crash hadn't completed so came in when the deficit was still low. It was fixed by the low interest rates and the housing bubble. A little bit of luck and the crash would have started after 2008 and he would have looked like an economic genius, which he definitely isn't. Instead Obama looks like it, and he now leaves before the next recession. A look at house prices and the stock market indicate that both are a bubble, and it will end badly for the next president, and nothing either of them can do will stop it. Trump will probably make it worse.

Antonio

Just a curiosity. How do you get the data for your re-visualization?
Did you find the data right source, or did you interpolate manually the WSJ chart?

Kaiser

Antonio: in this case, I just read off the chart so any mistakes are mine!

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