History

I know, it's another political piece... and I swear I have no intention of becoming a heavily political artist... I just had to get this off my chest... particularly after my mother said to me "Did you know the national deficit is in the TRILLIONS now?! All thanks to Obama!!!" To which my response was "been that way for years ma"... and she refused to believe that people had been talking about trillions since the Reagan administration... I was like 13 years old and I remember it.

Anyway... it was that conversation that prompted me to go and double-check my own facts and yes indeed, been that way since the Reagan administration... but when I did my little fact-checking run, I totally didn't expect to see this specific thing jump out at me.

Before anyone starts thinking that this was just me trying to get a jab in on the Republicans, let me point out that the national debt shrank slowly but reliably for THIRTY YEARS through both Republican and Democratic administrations as well as through several other wars (Korea, Vietnam). I'm not at all saying that Democrats are superior to Republicans here...

What I'm saying is that something went wrong in the Republican party's thinking on economic policies, starting with Reaganomics. It's pretty obvious that when Reagan made his doom and gloom comments in 1976, he was flat out lying, since the national debt was actually at a 30 year low, following steady improvement over the previous decades. What his reasons for this might have been, I have no idea. Yes, the amount fluctuated, but it trended slowly and steadily down. It wasn't until a few years later when Reagan was elected to the oval office that the debt actually became a problem as it spiraled up out of control in the few short years that he and Bush Sr were in office. And then he left office in '89 still complaining about a problem that he'd largely created.

The problem with Reaganomics is that it's based on fallacies about economics... it's based on ideas like the "rational market" and "trickle-down economics"... the reason why these theories are broken is because they presume that you can understand economics simply by looking at numbers. You can't. You can only understand economics if you first understand cognitive psychology. The rational market depends on the idea that people behave rationally -- we don't -- and so any theory that depends on the rational market is inherently flawed.

See Nudge by Richard Thaler, Predictably Irrational by Dan Ariely, and Yes! 50 scientifically proven ways to be persuasive. Human behavior is frequently if not most often driven by things that are not rational and so don't make any sense on the surface. How do you get kids to eat healthier in a school caffeteria? Change the order of the items in the line. You can still serve exactly the same menu, just place it differently. But why is the location of the food an incentive to choose it when all the food is right in front of you and readily available?! It's equivalent to having all accurate and relevant information about your available retirement savings options and still choosing a retirement plan that won't actually cover your retirement, because it was first in the list of options. (Which many people actually do.) As I said, we're not rational. But one big difference between us and the banks and multinational corporations is that the banks have teams of people deliberately exploiting cognitive psychology to their advantage (marketing departments have all sorts of tools for this like focus groups and dial sessions). We don't. That's why we need strong regulation on our side (as opposed to Reagan era radical deregulation), as a counterbalance to the corporations' ability to throw money at their efforts to exploit us (and then claim that they're not the problem a-la tragedy of the commons).

And then we had Clinton, who's administration actually managed to balance the government's annual budget and create a surplus there, in addition to getting the public debt back on a downward trend toward being eventually eliminated by 2012. So we know it can be done. (And incidentally it was all done by raising taxes and nobody really complained, because the country at large was prosperous.) The question is, will the Obama administration succeed in doing that? I don't know the answer. We're dealing with great-depression-style issues (see that spike at the far left of the graph?). Admittedly, our tools for dealing with it are better today than they were back then. They didn't have access to public information like this via the internet. I'd like to hope that the current administration are not too entrenched in the same Reaganomics myths and "supply side economics" that have caused all these problems... and if that's the case and they can consider alternative economic policies, I think that will help. (I'm pretty sure it's the only thing that will.)

But for now, if it concerns you that our government is now so overwhelmingly beholden to China (who've been maliciously manipulating the value of their currency for decades specifically so they could lord that over us), then the next time you hear someone complaining that "oh my god, we need to make the Bush tax cuts for the wealthy permanent or we're all doomed!!!" you can politely direct them here. Of course, this is also a good place to direct people who (like my mom) simply claim that the national debt problem is all caused by Democrats.