11 July 2012 - debt to GDP

Look at the graph of the ratio of U.S. government debt to GDP since WWII. It starts with huge war debts and falls fairly smoothly until the early 1980’s, after which it somewhat jerkily rises again. The turnover point is when Reagan convinced Americans, or at least Congress, that cutting taxes and raising expenditures would decrease the deficit, a belief that Americans, or at least Congress, sustained for thirty years. Magical thinking can cause a financial crash decades later, so vote for me as King of the World and defeat an ideological extremist today!