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What Do You Mean by 'Change'?

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I used to think that Reagan was fiscally irresponsible as president, compared to his predecessor.  But then I thought the same thing about Bush I, then Clinton, and now Bush II.  But surely, after the record-setting budget deficits and the massive increases in government spending, debt, and inflation of the last seven years, whoever is elected next must stop this trend, which can't continue forever.  Right?

Maybe not.  Bill Gross, the manager of the worlds biggest bond fund, said on Bloomberg Radio this week that "[t]hose who suggest that fiscal deficits of $300 or $400 billion are going to be standard are going to be disappointed.  They're going to be $600, $700, $800 billion.''  (Read more from Gross' interview here.)

This makes me wonder exactly what the presidential candidates mean when they promise change if elected.  If they mean change in terms of larger budget deficits, then then they need to explain themselves in more detail.  In many market sectors, the verdict on what they mean is not promising. 

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