Fifth Debt Ceiling Increase = Supply Side Failure

From Reuters:

With the U.S. government fast approaching its current $8.965 trillion credit limit, the Senate on Thursday gave final congressional approval of an $850 billion increase in U.S. borrowing authority.

The Senate voted 53-42 to raise the debt ceiling to $9.815 trillion, the fifth increase in the U.S. credit limit since President George W. Bush took office in January 2001. The U.S. House of Representatives approved the higher debt limit earlier this year as part of the overall budget resolution and the legislation now goes to Bush for his signature.

Every time the US has implemented supply-side economic policies total US debt explodes. Here's a chart of total US debt outstanding going back to 1980.

Q: But Bonddad! The budget is almost balanced!

A: Then why have we had to increase the debt ceiling 5 times? Why have we added over $3 trillion to the total national debt over the last 5 years?

Q: But Bonddad! Tax receipts are exploding!

A: No, they're not. Here is a chart of the year-over-year percent change in government receipts. Notice there is no meaningful difference between the supply-side experiments and the non-supply-side experiments.

So -- the country gets a bunch of tax deferrals because at some point we're going ot have to pay this debt down.

But remember -- tax cuts pay for themselves and deficits don't matter.