Same chart, annual rate. It is the long term chart, the ratio is with respect to real growth rate. The interest expense is nominal dollars, but the error is only a few months of inflation. So, this chart tells us how much DC really pays, whatever really means to you, but its meaning is the same real as in real GDP. It has dropped from the 90s, a bit; but relative to the 60s and 70s it is much higher.
Kanosians have a bunch of hat tricks regarding inflation reducing government debt, but real means inflation adjusted, I think. I don;t see any Kanosian tricks in this chart. What I see is that the ratio is range bound, and more range bound today than yesterday.
What does the ratio tells us?
It tells us what percentage of goods from the store are shipped out to bond holders watching TV.
What does it mean?
,Saying "the cost of government debt is very low" is wrong, fraudulent..
Another point. The smaller the limit range, the more short term volatility in interest payments. This chart confirms the corridor hypothesis.
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