Yikes! Deflation coming right at us?

Paul Krugman's got a post suggesting a linear trend towards deflation using two charts measuring monthly data for inflation based on two different measures (Cleveland Federal Reserve Bank's median consumer price inflation (expressed as a percentage based on an annual rate) and personal consumption expenditure index (excludes food and energy)).

Thought I'd also add some perspective to the stimulus bill that was passed and signed in February of 2009.

This first chart reflects the US economy since the first day George Bush took office. As previously noted, those tax cuts enacted had a strong influence on adding to the national debt. Notice how GDP is growing quite well, while federal receipts have begun to increase but at a much slower rate. If production is growing but receipts is growing slower, is this a sign of slowed inflation...heading towards deflation? Not sure.

But then I thought it was worth looking closer at the last 2 years, to compare the effects of the stimulus.

Yes, there was a short jump in spending, which appears to have had an effect on receipts recovering, but overall, spending did not really have that big of an impact on the overall trend of spending increases from the previous year.  And if you look at that longer chart going back to 2001, spending really hasn't had much of an effect, unlike receipts, to federal debt.  That is to say, that there were huge changes in receipts throughout George Bush's administration, which not just carried over to the Obama administration, but exploded just before Obama took office.

Just interesting info, if you want to discuss making those Republican tax cuts permanent, while trying to cut the federal debt.