Obama Vs. Bush: A Debt Illustration

By Justin Gardner | Related entries in Barack, Debt, Democrats, Obama, Republicans

I’m not trying to lay blame, but context about who has added more to this problem is important. Because Republicans voted to raise the debt ceiling every single time it came up under Bush 2.0 and now they’re not so cooperative.

NY Times has more:

A few lessons can be drawn from the numbers. First, the Bush tax cuts have had a huge damaging effect. If all of them expired as scheduled at the end of 2012, future deficits would be cut by about half, to sustainable levels. Second, a healthy budget requires a healthy economy; recessions wreak havoc by reducing tax revenue. Government has to spur demand and create jobs in a deep downturn, even though doing so worsens the deficit in the short run. Third, spending cuts alone will not close the gap. The chronic revenue shortfalls from serial tax cuts are simply too deep to fill with spending cuts alone. Taxes have to go up.

Yes, we have a new class of Repubs in the Congress, but that doesn’t mean that simple logic should be thrown out the window. After all, Warren Buffett suggests that the debt ceiling should be removed entirely.

Listen, default or downgrade isn’t an option. Somehow they’ll get this figured out. But as far as my opinion goes…I’m for the Gang of Six’s plan.

How about you?


This entry was posted on Monday, July 25th, 2011 and is filed under Barack, Debt, Democrats, Obama, Republicans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

38 Responses to “Obama Vs. Bush: A Debt Illustration”

  1. mw Says:

    Justin,
    I’ll agree with you on the “Gang of Six” plan, it’s fine. As is the Obama/Boehner compromise, which is what we will probably wind up with once we complete this last scintillating act of Kabuki theater.

    However, I cannot believe that you or anyone else thinks there is anything at all useful to take away from this brain dead chart. Let’s think this through – the basis for the chart is that all costs for all time is attributed to a new policy that is enacted during the term of that president. Okay…

    Then how about we add a bar for FDR and load 70 years or so of total Social Security costs to this chart exclusively under his name? Or how about Truman who must bear the burden of all costs for maintaining US Troops in Korea for the last sixty years, and I guess Europe too with the Marshall Plan and NATO. Then we can move on to LBJ who gets all of the accumulated fifty years of costs for food stamps, welfare, medicare, and medicaid. Stack these three up, and neither GWB or OHB will show up as a rounding error. Now that I think about, I think that a standing army was a new policy enacted by George Washington – Once we pile up 200+ years of defense spending on George, I guess we finally have tracked down the real culprit for our deficit and insane spending.

    I cannot believe that anyone would take this chart seriously or – for that matter – that the NYT would even publish anything so monumentally mind-boggling stupid.

  2. cranky critter Says:

    It’s not nearly THAT stupid, and I don’t think it’s nearly stupid enough to be blithely dismissed with the sweep of a hand. Talk about what it leaves out and conceals if you want, but Bush’s tab is what it is. That can’t be dismissed.

    Of course, if we looked at the average annual deficits run by Bush and by Obama so far, that tells a substantially different story. If the democrats had bothered to write, you know, budgets while they controlled congress, they could have curbed Bush’s overspending had they really wanted to. They could have also, by the way, raised the debt ceiling before the tea party freshman took office, but Harry Reid said it was better to let the new crop deal with it. Well played, Harry.

  3. cranky critter Says:

    oh, moderated for the nth time, on top of 2 fairly brief comments yesterday that simply got gobbled up. Getting really old.

  4. mw Says:

    @cranky – I used to be able to release comments from moderation, and would do so when I was hanging around – However, my permissions changed some months ago and I no longer have the power to release comments from purgatory except on my own posts.

  5. Aaron Says:

    @mw – Okay sorry my editor brain is kicking in here. I’m assuming you mean BHO, not OHB, right? Obama is his last name. :)

    Anyway carry on! I’m also in support of the Gang of Six plan.

    As for the chart, I’d be curious to see it broken up by year in office. I do agree the Bush tax cuts are 95% of our problem today but he did have several extra years in office over Obama at this point. I’d be curious the year to year average comparatively.

  6. michael mcEachran Says:

    mw – I don’t know. Things tend to be mind-bogglingly stupid to you when they don’t fit your narrative – a typical Repub response to criticism, along with the bullying tone. I guess you guys won’t give that up until it stops working. So we are supposed to succumb to your mock outrage and pretend there is nothing relevent in this data. yeah. “These are not the droids you’re looking for. Move along.”

  7. cranky critter Says:

    The substance of my comment was that it doesn’t wash with me to try to blithely sweep this chart away by saying its stupid. Sure, there may be issues with it, but Bush’s tab as President subsequent to the balanced budget Clinton left is demonstrably relevant to current matters.

  8. mw Says:

    @aaron
    Yeah got a bit dyslexic there.

    I also lost the permission to edit my own comments. It was a luxury I enjoyed for a few years so could be lax with my proofing. I guess I have to be more careful and stop posting after two scotches at midnight.

    Although that is when I do my best work.

  9. mw Says:

    @Michael
    First to correct the record – I was highly critical of the irresponsible spending policies during the six years of Bush / Republican six years of one party rule at the time. In fact, at the time I thought that it would be impossible to be any worse. I was wrong. Two years of even more wildly irresponsible spending under Obama and the Democrats one party rule was far far worse than even Bush and the Republicans. Who knew? Two trillion of net new spending in two years in two bills passed on pure partisan votes set the bar for just how bad it can get.

    That said, I have no interest in seeing the Republicans return to control of both legislative houses and the White House, so – unless the political dynamic for 2012 changes dramatically – I will be supporting Obama’s re-election to avoid it. I’m quite happy with how this divided government thing is working out. When the debate is whether we are going to cut $3 trilion or $4 trillion – I am not too concerned where we wind up in that range.

    None of that changes the fact that this chart is based on a demonstrably false and nonsensical premise. You cannot compare 2, 10 or 44 presidents based on the accumulated life-to-date costs of “New Policies” passed during their administration. I demonstrated how ridiculous that premise is in my comment. It is a completely meaningless comparison. To pretend that anything useful can be gleaned from a chart based on that false premise is intellectually dishonest.

    However I understand what you mean about facts not fitting the narrative. This chart was a perfect example of a statistical contortionist twisting themselves into a pretzel to try and make the facts fit their preferred narrative. You don’t need to work that hard when the facts speak for themselves. Just look at the budgets and bills submitted by this President over the last two and half years. It is right there and easy to see.

    Or you can try and twist the facts into your preferred narrative and project your biased view on me. Feel free.

  10. mw Says:

    C’mon Cranky. You cannot be defending this chart.

    Sure it is legitimate to compare spending and fiscal discipline in the Clinton, Bush, and Obama administrations. We know exactly how that turns out.

    The Bush administration was really really bad on spending and fiscal responsibility. The Obama administration has been far far worse.

  11. michael mcEachran Says:

    mw- You either believe or you dont:

    1. Keynes was right, and therfore the Bush/Obama stimulus measures were neccessary and prevented a second great depression.
    2. The bailout of the auto-industry was a good investment for the country
    3. The CBO knows what’s its talking about when it rports that “Obama care” will save us money over time
    4. Obama’s wild-eyed binge expenditures were neccessary evils, rather than discretionary like most of Bush’s – ie. war in Iraq, prescription drug benefits, etc., etc., etc.

    I’ll agree that Pelosi, Reed, and many democrats tended to give off a slightly nervous gleeful energy when it came to the spending this money, which drove me crazy. too. But I don’t see the evidence that Obama is manking any of these decisions lightly, and without the long term consequences in mind. I will give you that I appreciate divided government, too, and think its good for us that Obama (or any President) is getting sufficient pushback, but only as long the government is divided between two parties who have disagreements, but genuinely have the country’s best interest in mind. I don’t want Dems to have the keys to kingdom any more than I want the Repubs to, but I really don’t think Repubs have my best interest in mind. I don’t. I think that this grass roots (teaparty or whatever) moveement has been astroturfed into hating this president and following the big monied interests like lemings, while my future and most of the middleclass’s future hangs in the balance. I’m pissed, and sick of it. I think one side of your divided government are completely untrustworthy and would rather see us go down the pisser than allow a liberal president get credit for anything.

  12. Mike A. Says:

    And all the while, countries like Germany, with it’s high individual and corporate tax rates, government investment in strategic development and infrastructure, socialized medicine and security programs, high primary education standards and nearly free higher education offerings has recovered from the global recession with growing exports and a respectful GDP. Every one of the above is considered an anathema to the current republican leadership.

    Not saying the Dems have a great idea of a strategic plan, but I believe the Republicans plan is a recipe for a wonderful 3rd world economy.

  13. cranky critter Says:

    Sure I can. Your standard seems to be that it’s stupid because it doesn’t tell the whole story.

    My standard is that it includes relevant facts, therefore it’s relevant. EVERY president (and every congress) should be held accountable for the price tags of the stuff enacted on their watch.

    I never said I buy the chart’s implication that it’s all Bush’s fault and Obama is blameless.

  14. cranky critter Says:

    Mike, are you suggesting that Germany’s economic health is caused high taxes, government involvement in “strategic development, socialized medicine, etc, etc?

    IMO a much better guess is that it’s due to their enduring great fear of debt due to the extremely painful monetary crisis that they actually lived through in the aftermath of WWII. Imagine a wheelbarrow full of marks.

    How hard is it to see that unsustainable debt is the problem, really? Germany already LEARNED their lesson. Of course, as you might rush to point out, perhaps Germany understands that debt can be countered with both increased revenues and lowered expenditures.

  15. cranky critter Says:

    ..aaaaaaand I’m down for the count again.

  16. cranky critter Says:

    My bad. Weimar was after WWI, not WWII. That will make sense if my comment is freed.

  17. Mike A. Says:

    cc

    Mike, are you suggesting that Germany’s economic health is caused high taxes, government involvement in “strategic development, socialized medicine, etc, etc?

    Not at all. My point is that a nation can support “strategic development, socialized medicine, etc” and have a thriving economy. My comments were not endorsing “unsustainable debt”.

    Your comment about their post world war II experience is a good one. The analogy to Germany’s lessons learned would be our great depression. Imagine a wheelbarrow full of dollars…

  18. Tillyosu Says:

    @ michael mcEachran

    1. Frankly I’m surprised that anyone outside of Paul Krugman’s office still believes in Keynesian economics. I think the one clear lesson that we can take away from Obama’s grand Keynesian experiment is that stimulus economics is, at best, ineffectual. And the argument that “things would have been worse” or that “we prevented a Great Depression” is bogus because it is unfalsifiable. I tend to think we should judge policy decisions on the evidence we have, not the evidence we would have had. And the evidence shows that unemployment has risen since the stimulus was enacted. And I know you’ll respond that unemployment would have been higher were it not for the stimulus, but consider this: the administrations own economists have conceded that each job that was supposedly “saved” by the stimulus cost taxpayers $278,000. By what standard can that be considered a success?

    2. At present, the government is expected to lose $14 billion in the auto bailout, or 17.5% of it’s original investment. I don’t know about you, but I don’t know of any investors who would consider that a good “investment.” BUT, you might argue, it was worth it to save all those auto jobs. Ok, at present the Big Three employ roughly 187,000 hourly and salaried workers. If we assume that every one of those workers would have been unemployed were it not for our $14 billion investment, that figures out to about $74,866 per worker. Does that still seem like a good investment to you?

    3. For an answer on this one, I’ll simply refer you to that notorious conservative rag – Newsweek.

  19. michael mcEachran Says:

    @ Tillosu – “And the argument that “things would have been worse” or that “we prevented a Great Depression” is bogus because it is unfalsifiable.”

    In the same way that the notion that Bush’s hyper-reaction to 911 spared us from a second major attack in the US unfalsifiable. So, according to your logic Bush was wrong to proceed with “harsh” intorrogation, rendition, Guantanimo, eavsdropping, heightened airport security, instituting a homeland security department, etc. We didn’t have an attack on US, exo facto, there is no evidence that Bush can take credit for protecting us from a second attack.

  20. michael mcEachran Says:

    I meant “Ipso facto”. BTW – I think Bush deserves more credit than he gets on terrorism, the way he and Obama deserve more credit than they’ll ever get for sparing the globe a catrostophic economic meltdown beyond what anyone can imagine. I don’t expect Tillyosu or anyone of his ilk to concede, the way I don’t expect pinko liberals to concede that Bush was exactly the big dumb guy we needed for the bar fight we had (are having) with militant Islam.

    Tillosu -

  21. Tillyosu Says:

    I don’t think Bush ever made the argument that heightened security measures, or even the invasion of Iraq, were necessary to avoid the certainty of a second major attack. Instead what he argued was that they were necessary to avoid the risk of a second major attack. The two are very different arguments.

    So am I saying that there certainly would not have been a “catastrophic economic meltdown beyond what anyone can imagine” if we hadn’t passed the stimulus? The answer is – I DON’T KNOW. But then, neither do you.

  22. michael mcEachran Says:

    Right. You don’t know. You don’t know that Obama’s Keynesian response was ineffectual. Thank you for clarifying.

  23. Tillyosu Says:

    Here’s what I do know: when the stimulus passed, Obama claimed it would create 3.3 million jobs. Since then, we’ve lost 2.8 million. And for that, we spent $666 billion. Ya, I’d say it was ineffectual…at best.

  24. kranky kritter Says:

    How are you so sure it would not have been much worse? Please don’t be a nitwit and say “how could it have been worse?”

  25. kranky kritter Says:

    Once I had a sinkhole in my backyard. I estimated I needed 4 yards of loam to fill it. Since I garden, and there was a delivery charge unless you order 6 yards or more, I got 6 yards, planning to have 2 yards leftover. The 6 yards ended up not quite bringing the area up to grade level.

    Was the 6 yards of loam ineffectual?

  26. Tillyosu Says:

    I’m not. But how are you so sure it would have been worse?

    All I’m saying is that we can only judge the stimulus by the data that we have, and the data shows that the economy, particularly unemployment, is worse than it was when the stimulus passed.

  27. Tillyosu Says:

    Haha KK that’s a pretty stupid analogy. But I would say that if you dumped the loam into the sinkhole, and the sinkhole stayed the same, or got deeper, then yes, it was ineffectual.

  28. kranky kritter Says:

    No, the sinkhole didn’t stay the same. It was reduced, but wasn’t completely filled.

    I am never surprised when people call analogies stupid when the truth is that they just don’t like the implication. My point’s clear and unmissable, and you’re just being evasive. You don’t know how badly the economy could have faltered without the infusion of 1 trillion, but that’s inconvenient for folks to admit.

    Especially when believing that 1 trillion dollars had no positive economic impact makes their opinions seem so much sounder. Just more evidence that if we manage to default, we deserve it.

  29. Tillyosu Says:

    KK the analogy is stupid because the economy is not your garden and a recession isn’t a sinkhole. But I’m glad you brought it up because it allows me to highlight the fundamental mistake that Keynesians make.

    Government spending isn’t an outside “infusion” of money, like loam you can order from a vendor. In order to raise the funds for the stimulus, the government had to either borrow or tax the money. In either event, the money is coming OUT of the economy, before going back in. All stimulus spending does is take money from millions of economic decision makers, and hands it to maybe a couple dozen decision makers. In other words, it does nothing but reduce economic efficiency. And adds political considerations to boot. That’s why you saw millions of dollars being wasted to preserve mouse habitats or to bring the internet to Montana…measures that no reasonable person could consider “stimulative.”

    So to continue with your analogy, it’s as if Obama jumped down into the sinkhole, dug out a bunch of dirt, and then threw it back in in a terribly inefficient manner, and called it a “stimulus.” No wonder we’re worse off.

  30. Tillyosu Says:

    And my point was that not only did the economy not get better, it got worse. So if you dumped in a bunch of loam, and the sinkhole not only didn’t filled, but got deeper, wouldn’t you say it was ineffectual?

  31. michael mcEachran Says:

    @ Tillyous – I know you’re smarter than that. No smart person thinks that stimulus is money created. We all know that stimulus is money redistribuited from tax dollars and loans for the purpose of “stimulating” a frozen economy. You distorted KK’s analogy – In your distorted version the point of the “loam” wouldn’t be to fill the hole – the point of it would be to get people up and off their frozen butts and engaged into the act of filling the hole. See, Tillyuuu, money doesn’t actually have any value (anymore) – it’s the value of what it represents – Its a reflection of an economy whence it came. An economy by definition is the act of money moving around. Money has value when it represents an economy that is moving, which is why economists worry about it so – which is why stimulus is sometimes neccessary to get it moving. Becuase money without economic movement is worthless.

  32. kranky kritter Says:

    Really? Who fails to understand that an analogy suggests that “A is like B,” and not “A is B.” Are educated adults actually confused about this?And as Mike points out, we all know that a stimulus is redistributive.

    All stimulus spending does is take money from millions of economic decision makers, and hands it to maybe a couple dozen decision makers. In other words, it does nothing but reduce economic efficiency.

    Oh, that’s “all” it does? Nothing else? Riiight. Overstating your case, as always.

    Your point would be much much stronger if markets were remotely efficient in the first place. But no serious person could make the argument that capital was hard to come by. A very big part of the economic collapse was an oversupply of capital and a shortage of desirable investments. Your beloved economic decision makers continued to decide to invest in US bonds because they were more attractive than other options. Unless I missed the part where America forced everyone to buy our debt.

    How much whiny special pleading are we supposed to stomach from economic conservatives? When they reach the point of complaining about investors making free choices to invest in government debt because other areas are in the tank, I know they don’t know anything other than to do their best to interpret everything the other side does as wrong.

    Am I really supposed to believe that if that 1 trillion hadn’t been dumped into the economy, that these alleged smart decision makers would have better spent that same trillion in ways that saved the economy more? They wouldn’t have parked it in really safe places and sat out the storm? Please. That’s no more than an idle fantasy that you find necessary to believe.

    I am happy to agree that a substantial portion of that stimulus money was poorly targeted or wasted. I have a supple enough mind to acknowledge that and still think that the trillion bucks was way way way way too much dough not to have done some domestic good in the short term. You don’t know how bad things might have gotten if the fed just sat it out. On that matter, all there is for you is what you prefer to believe.

    But hey, maybe you’re right. Maybe amid all that panic and fear and economic horror, the economy wasn’t on the brink of collapse. I don’t know either. All I know is what that time felt like, and that emotion and perception plays a very substantial role in economics. I think we have a shortage of people whose opinions on economics incorporate the impact of perception being reality. Especially when peopl are panicky. That kind of obvious but amorphous and unquantifiable stuff unacknowledged by free market true believers.

  33. Tillyosu Says:

    Aaaand you descend into incoherence.

  34. kranky kritter Says:

    Awesome comeback!

  35. michael mcEachran Says:

    Could have tighted that up for sure.

  36. michael mcEachran Says:

    The notoriously liberal rag The Economist sums it up nicely:

    “[In 2008] America had plenty of room and every reason to borrow and spend heavily. What it didn’t have, unfortunately, was an accurate picture of the economic situation. And that was a crippling limitation indeed.

    What’s striking to me is that as new data have revealed the true dimensions of the 2008 collapse, the public’s perception of events hasn’t much changed. Critics still jeer the stimulus for its failure to deliver promised results, despite the now-obvious inadequacy of the package. Few in Washington seem willing to discuss how drastically officials underreacted in 2009, and how the results of that underreaction are still with us, waiting for a more appropriate policy response. I don’t know which tragedy is the more troubling: the failure to see the true scope of the disaster when accurate numbers weren’t available, or the failure to see it now that they are.”

  37. Jerry Coldwell Says:

    Why do you thing that downgrade isn’t an option? I think it might be the only option these days.
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  38. Donklephant » Blog Archive » SPOILER ALERT! How the debt ceiling “crisis” ends. Says:

    […] There is a significant faction of the electorate who would like to see our country more closely emulate a European style social welfare democracy. There is an equally significant faction of the electorate who would like to see our country move […]

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