An Exercise in Contrasts

From Representative Paul Ryan’s “Path to Prosperity”:

The United States is facing a crushing burden of debt – a debt that will soon surpass the size of the entire U.S. economy and ultimately capsize it if left on its present course.

From reality:

This graph shows the amount the United States pays per year on interest for its debt. If this is what being “crushed by debt” looks like, then we’re doing pretty well.

More seriously, this is another reason why it’s silly to focus obsessively over the total amount of debt. Yes, a large debt burden is a long-term liability, but at the moment—when global markets are eager to purchase US debt—there are more pressing issues to deal with, like high unemployment and a sluggish ecovery.

Comments

This graph shows the PERCENTAGE the US pays per year, not the total. One can be crushed under a 1.5% interest rate if the principal is high enough. By the way, this looks a lot like "how to lie with statistics." The data presented does not refute the statement by Ryan, the labels on the graph are confusing (millions in interest per 1000*billions in principal = millions per millions, or just a unitless fraction). The graph looks more dramatic because its range is from 1% to 3.5%, and it would appear somewhat less dramatic if it went from 0 to 3.5%. Starting your range at a limiting value (like zero) is considered to be a best practice in data presentation.

People who object to the GOP's policies are best suited by actually addressing their claims. In this case, Ryan is right: the USA is being crushed by debt. However, the best option is to return federal revenue to the long-term average of 19% of GDP from it's current low of about 14% and adjust program mix to match it. Ryan's statement of the problem is not the issue, it's his proposed solutions to it.

One more point: willing lenders was the problem that led to the financial crisis. From 2000-2008, global markets were eager to purchase US household debt, and we opted to address the problem of increasing home ownership rather than household indebtedness. Wrong choice!

Actually 1000*billion is a trillion so it's millions per trillion. The labels aren't that confusing. Also starting the graph at 0 would not change the writer's point, since it would just shift the plot upwards and the comparisons between now and the past would remain the same. Your other points are interesting, I just wouldn't get so hung up on the plot.

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