political polarization index tax news in plain english

The Political Polarization Index

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The Philadelphia Fed recently  released a report that illustrates the “political polarization index”. The report is a working paper presented by Marina Azzimonti and the index is intended to quantify the divide between the Republican and Democratic parties  at different points in time from 1981 to 2013.

This is a startling chart that tells the whole story and should be viewed by every US taxpayer.  A high reading indicates maximum polarization.  We would expect that this phenomenon would naturally occur during election season and may even be considered a healthy process.  Not so, when our leaders are charged with working with one another to solve critical problems.  This graph confirms the dysfunction but also highlights the  constant upward trend of this divide – literally off the page.

Conversely, look at the drop in polarization (inflection points) at crises times:  9/11, the Iraq invasion and during the financial upheaval between 2007 – 2009.

A picture tells a thousand words.