oweno.com should be Oh, No! What a Load of Crap!

Nothing bothers me more than dishonesty in pushing national policy. I saw a commercial for oweno.com last night and again tonight while watching the news, and from the content, my 'National Scare' radar jumped into high gear. So, I checked out the site, and it is awful! But, just to demonstrate to you how awful (and why you should treat anything this bunch advocates with more than a little prejudice), I'll take it apart for you...

Can you imagine 13 trillion? Neither can I. oweno starts out by telling us that the National Debt is 13.6 trillion dollars. But, they never tell us what it means. And, because we can't imagine 13 trillion, we assume that must be a 'Big Deal'. However, this is to commit the fallacy of large numbers: Just because a number used to describe something is unusually large doesn't correlate that its meaning is similarly big.

We need something to compare it to. I have an idea: Let's compare the National Debt to our country's National Yearly Income: The GDP. Pulling numbers from the US Bureau of Economic Analysis (bea.gov), we can see that the US GDP for 2009 was 14.1 trillion dollars - so another way of expressing the US Debt would be to divide it by the US Income, and we get... 1 (One). Yep. The US Debt is 1. Consider this: Most US households, those that own their home, have a Debt of 2 or greater. So, is a US Debt of 1 a big deal?

If I told you that the US Debt over the last 100 years has ranged from .35 to 1.21, you would have a little more information. And If I told you that the debt of 1.21 occurred at the close of WWII (1945), and the most recent low of .5 occurred during the Carter Presidency, you would have a little more information. Yes, our debt has been growing since Reagan took office, after a long decline during the presidency's of Truman, Eisenhower, Kennedy, Johnson, Nixon, Ford, and Carter. It rose during Reagan and Bush, dropped during Clinton, and has risen again during Bush and Obama.

I could go on dragging up information about the US Debt, looking at other countries' debt, what economists would have to say, but you get the point: oweno.com starts out by telling its readers nothing, and instead attempts to scare them using very large numbers. Not a very auspices beginning for an organization 'dedicated to raising awareness about America’s fiscal challenges and accelerating action on them.' It takes information to raise awareness...

The second paragraph continues the fallacy of large numbers, as does the third. Hmmm, not doing very well in the information department yet...

Oh, the third then attempts to scare us again with the statement that 'half this money [$200 billion interest on the debt] goes overseas to foreign governments that own our debt.'

Yep, foreign governments do own our debt. They do so because we trade with them, and instead of importing and exporting in equal measure, we have been running a trade imbalance for the last decade: Foreign goods come into America, and American dollars go overseas to pay for them. The overseas nations then purchase US Treasury Bonds, since they can't purchase a like amount of American Manufactured goods. Economists from Krugman to Baker to Galbraith to Salmon to Thoma and on and on have been pointing this out for the last 10 years - you would think that a 'former Secretary of Commerce (Peter G. Peterson)' would also understand this: It's the overvalued US dollar that contributes to the 'fact' that foreign countries 'own' our debt, not our profligate ways.

The fourth paragraph is the most egregious of all, however. The foundation claims that the debt could 'double' by 2020, 'triple' by 2030, and 'quadruple' by 2040. Why the scare quotes? Because, they are being inherently dishonest with these statements (and one suspects they 'know' it, but are doing a little cya.)

Sure, the National Debt could 'quadruple' to $50 trillion by 2040, but where do you suppose the National Income could be in 2040? That's 30 years from now - Let's take a quick look at our historical change in National Income (GDP): Looking at numbers (again from bea.gov), we can see that the National GDP was $2.5 trillion in 1979, $5.4 trillion in 1989 (more than 'double'), $9.4 trillion in 1999 (more than 'triple'), and $14.1 trillion in 2009 (more than 'quadruple', in fact, almost 'sextuple'!!!!!) Oh, My, Gosh! Peter G. Peterson and oweno just gave away the game: If our debt were to continue at the current rate of 1 (One), and our GDP were to grow at historical rates, then our debt would become $50 trillion in 2040, which would be UNCHANGED from today!

That is how you lie with big numbers, folks. The fourth paragraph reveals the foundation for the dishonest charlatans that they are - they attempt to scare us using big numbers without grounding those numbers in anything meaningful to which they apply. An honest organization would look at the debt in a meaningful way, using meaningful language to describe it. They would honestly say that we don't know whether the debt will grow or shrink in the coming years, and not attempt to scare us by showing how big of a number could by used to describe it if it were to remain equal to our GDP. An honest organization would look at the factors that increase the debt, and what occurred during the period from 1945 to 1980 that coincided with a steady decline of the debt, and the factors that accompanied its rise since then (and I deliberately say 'coincided' and 'accompanied', because causation is very, very difficult to determine in the noisy system that is our economy.)

I suspect that the Peter G. Peterson Foundation has something in mind, and it's not something that will be universally, or even majorly, good for Americans. I'll keep looking at (and rebuking) oweno until we figure out just what they want, and why they aren't willing to be honest in their evaluations in their attempt to get it.