If we use terms such as "the new normal" for the economy, what was the old normal? Was there even a "normal," or were things always turbulent or spiraling out of control?
Believe it or not, the federal budget used to have a "normal." It was not spiraling out of control. It was not very turbulent. Life was good...it really was.
Look at this chart. It shows federal government spending and revenues over the four decades of 1968 through 2007. To the eyeball, both 40-year squiggles look about flat. In fact, a statistician would say they are very flat. The dashed lines are the linear regression lines.
Believe it or not, the federal budget used to have a "normal." It was not spiraling out of control. It was not very turbulent. Life was good...it really was.
Look at this chart. It shows federal government spending and revenues over the four decades of 1968 through 2007. To the eyeball, both 40-year squiggles look about flat. In fact, a statistician would say they are very flat. The dashed lines are the linear regression lines.
Data source: White House Office of Management and Budget, Table 1.2
How flat are those trend lines? If they continued for an entire century past the midpoint of the above data set, federal spending would be 18.2% of GDP in 2088, and the federal government would be in slight surplus. That is what you call "sustainable."
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