"The Great Gerrymander..."

Sam Wang @ NYTs:

HAVING the first modern democracy comes with bugs. Normally we would expect more seats in Congress to go to the political party that receives more votes, but the last election confounded expectations. Democrats received 1.4 million more votes for the House of Representatives, yet Republicans won control of the House by a 234 to 201 margin. This is only the second such reversal since World War II. 

Using statistical tools that are common in fields like my own, neuroscience, I have found strong evidence that this historic aberration arises from partisan disenfranchisement. Although gerrymandering is usually thought of as a bipartisan offense, the rather asymmetrical results may surprise you. 

Through artful drawing of district boundaries, it is possible to put large groups of voters on the losing side of every election. The Republican State Leadership Committee, a Washington-based political group dedicated to electing state officeholders, recently issued a progress report on Redmap, its multiyear plan to influence redistricting. The $30 million strategy consists of two steps for tilting the playing field: take over state legislatures before the decennial Census, then redraw state and Congressional districts to lock in partisan advantages. The plan was highly successful.

"Why the US government never, ever has to pay back all it's debt"

Mathew O'Brien @ The Atlantic counters the deficit hysteria:

How will our children, grandchildren, and sundry other friends and relatives too young to see an R-rated movie unaccompanied ever pay back the entire debt the government is piling up now? Easy. They won't. The U.S. government is never completely debt-free (except for that one time it sold land seized from Native Americans).

There's only one thing you need to know about the government. It's not a household. The government, unlike us, doesn't need to pay back its debts before it dies, because it doesn't die (barring secession or a sneak attack from across the world's longest unprotected border -- a most unworthwhile initiative). In other words, the government can just roll over its debts in perpetuity. That's the point Michael Kinsley misses when he says we "can't borrow forever," in an otherwise fine column trying to convince unemployment and deficit hawks that they actually agree on a "barbell" approach -- stimulus now, austerity later -- to fiscal policy. We can, and in fact have, borrowed forever. And that doesn't mean our debt burden will go up forever either. As you can see in the chart below, the government dramatically decreased its debt-to-GDP ratio in the three decades following World War II, despite mostly running deficits during the time. 

(Note: This chart shows gross debt, which includes debt the government owes to itself, such as the Social Security trust fund. Debt-to-GDP is on the left axis; deficit-or-surplus-to-GDP on the right).

Here's the budget math. Between 1946 and 1974, debt-to-GDP fell from 121 to 32 percent, even though the government only ran surpluses in eight of those years (and the surpluses were generally much smaller than the deficits). That's because nominal GDP -- just the cash size of the economy -- grew much faster than debt did. As Greg Ip of The Economist points out, fast nominal GDP growth, and the easy monetary policy that requires, is the only way governments have ever successfully reduced debt ratios in the past. Austerity alone will fail. (See Europe).

Okay, so maybe endless debt and deficits aren't a problem, but won't bond markets go Galt on us if we don't start to get our fiscal house in order? And even if the bond vigilantes turn out to be more like Godot, won't ever-increasing debt lead to ever-decreasing growth?