My primary point is that the graphs show the reasonably distant past as well as the present but there is no meaningful comparison between the two in them. I think they are intellectually dishonest. Honestly I think they fit into the "lets make it say what we want" category. They use data which ignores a huge confounding variable - the data shown in the graphs I posted doesn't include that variable and is much better from a statistical viewpoint.

My point from the start has been that the graphs in the op purposefully choose data that ignores inflation in order to exaggerate the magnitude of the current recession.

NJ5 said that inflation has not had a major effect on the graphs, the graphs I've posted clearly show that inflation has had a huge impact on the data - the two sets of graphs look nothing alike. The original set of graphs has exponential curves (which is what would be expected from inflation) while the second set of graphs does not.


Most of the time so far I've been arguing purely on the merits of the statistics, not on the conclusions drawn from the statistics.

I admit I should have been clearer about the conclusions I was taking from the graphs from the beginning, I guess sometimes people wrongly assume other people look at things in the same way. But anyway I still think the graphs have a lot of value, even with the inflation issue, so they shouldn't be dismissed as "almost useless".

Anyway, I think the situation in the graphs results from the government taking on the private sector's problems into its own balance sheet (via bank bailouts, extensions of unemployment benefits and many other initiatives). Effectively we're seeing the government attempting to prop up an unsustainable level of debt in the private sector, thereby getting into a lot of debt itself. The hope is of course that the economy starts growing significantly on its own, allowing the government to get out of the way and fix its own problems, but that doesn't look that likely.

If you see this as a Ponzi scheme (which many people do, and not only regarding the US economy), I guess the government is the buyer of last resort before the whole thing comes crashing down. On a related note, I read that unfunded liabilities of the US government (including social security payments etc.) represent more than 500% of GDP. With a lot of baby boomers retiring over the next decade, this (if nothing else) will cause major trouble.