Look: I am eager to learn stuff I don't know--which requires actively courting and posting smart disagreement.

But as you will understand, I don't like to post things that mischaracterize and are aimed to mislead.

-- Brad Delong

Copyright Notice

Everything that appears on this blog is the copyrighted property of somebody. Often, but not always, that somebody is me. For things that are not mine, I either have obtained permission, or claim fair use. Feel free to quote me, but attribute, please. My photos and poetry are dear to my heart, and may not be used without permission. Ditto, my other intellectual property, such as charts and graphs. I'm probably willing to share. Let's talk. Violators will be damned for all eternity to the circle of hell populated by Rosanne Barr, Mrs Miller [look her up], and trombonists who are unable play in tune. You cannot possibly imagine the agony. If you have a question, email me: jazzbumpa@gmail.com. I'll answer when I feel like it. Cheers!

Friday, January 7, 2011

Deficits in the Viet Nam Era

One of the remarkable things about the Viet Nam war was that it did not bust the budget.  WW's I and II led to big deficits, as have our excursions into Iraq and Afghanistan.  To make the point, here is a graph of deficit as a percentage of GDP.  To provide some context, dates from 1950 through 1980 are included.



Despite Ike getting us established as early as 1955, the bulk of U. S. involvement came from Johnson's escalation in late 1963 through the end of the war in 1975.  These years are highlighted in red on the graph, or you'd never be able to pick them out.  Except for two specific years, 1968 and 1975, the period was actually quite frugal.  For context,  I've thrown on 3, 5, and 8 year moving averages, as well as the best fitting straight line in dark green.

The most striking feature of Viet Nam era deficits is that they are so remarkably unremarkable.  Why?  It's simple.  Revenues grew at about the same rate as expenses.
.

2 comments:

Suzan said...

But of course. It never occurred to Johnson, a good Democrat, to cut taxes for the rich while he funded the Eisenhower/Dulles/ChaseManhattan wars and the programs comprising the safety net of that time.

Funny how no one ever mentioned that passed Ronnie Rayguns spending/tax cutting spree isn't it?

Thanks, sweetie!

S

Steve Roth said...

Here's what I don't understand: gross public debt/gdp was on a steady decline from '45 to '81. How is that possible when your numbers show deficit/gdp being positive in most of those years? Gotta look at the data sets, I think...