What can we deduce from this picture?

1. The note is used to establish a baseline to adjust for inflation so that, in theory, we are comparing apples to apples, budgetarily speaking. But this is potentially subject to gaming, since had 1980 dollars been used as the baseline, we might have had a different looking graph. Hard to know for sure without all the underlying data.

2. Everything after 1996 can be thrown out since it is just an estimate based on budget projections in 1996. These are notoriously bad and can in fact paint a much worse picture than the one given here. This is, in some respects, one of the strangest ways to look present this data. What’s more, these are all just estimates by a hostile organization, since some of the intelligence budgets are black, i.e., not made public.

3. The y-axis is titled “Real Percentage Change from 1980.” I think this means that they are measuring each fiscal year budget independently as it is compared to the budget in 1980. What does this mean? Spending in 1980 dollars peaked in 1989. If we assume that spending on intelligence was $100B in GFY 1980 (as measured in 1996 dollars), then spending in GFY 1989 was approximately $225B (as measured in 1996 dollars), and spending in GFY 1996 was approximately $180B (as measured in 1996 dollars). This represents a 20% decrease in the intelligence budgets over those 7 years. Using the same formulas, defense spending dropped almost 50% over the same 7 years.

4. My comments about derivatives were completely wrong, because I misread the chart. Here’s the same data with another line data set overlaid to represent the change each fiscal year in the intelligence budget in 1996 dollars.

This clearly shows the budgets for intelligence were not doubled during the Clinton years.

And here’s the same chart displaying only the year to year delta to help illustrate that further.

In fact, from 1990 – 1996, the annual budgets for intelligence dropped from a high of $223B in 1990 (measured in 1996 dollars) to $179B in 1996 (measured in 1996 dollars), or a drop of approximately 20%.