Nobody From Nowhere (@i8dc)

Occasional Common Sense

Cheating in the Deficit Blame Game

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I started writing this thinking Megan McArdle just did some sloppy work, but the more I look at it, the more clear it is that she’s being flat out deceptive.

In this 7/29 article, McArdle has a legitimate question of the Obama administration’s assignment of deficit responsibility in this graphic.  “When Obama extends the Bush tax cuts for the rich under pressure from Congressional Republicans,” writes McArdle, “that disappears from his side of the ledger.”  Fair criticism – Obama signed the extension, that part is his, even if he would have preferred to kill some of the tax cuts.

So how much are we moving from one side to the other?  A hundred billion maybe?  Two hundred billion?  So the score’s really more like Bush – $6.8T, Obama – $1.6T.  Happy now?

No. Then McArdle writes: “When Bush enacts Medicare Part D under pressure from Congressional Democrats, the full cost is charged against his presidency.”  Under pressure from Congressional Democrats?  You mean the ones that were in the minority in both houses?  The Democrats who voted 189-16 against in the House and 35-11 in the Senate?  You mean the ones who subsequently pressed for an investigation into vote-buying by Republicans during the vote scheduled for 15-minutes that lasted for three hours?  Riiiiight.

“It’s not really very easy,” declares McArdle, “to look at these graphs and tell a story where the deficit is 1.6% under George Bush in 2007, and then suddenly balloons to 10% under Obama a few years later–and does so almost entirely as a result of policies initiated under George W. Bush, and only those initiated under George W. Bush.”

Actually, it’s quite easy.  Why do you suppose McArdle uses 2007, when Bush’s economy peaked, rather than FY2009, Bush’s last budget year, when the deficit hit 10% of GDP?  Certainly, Obama’s stimulus added to the 2009 deficit – $113 billion, to be exact, or 0.8% of GDP.

But it’s not feasible to say that by September 2009 Obama was responsible for any part of the Bush tax cuts, or much of the two middle east wars, or Medicare Part D.  So the deficit baseline from the Bush administration is much more fairly the 2009 figure less the stimulus, or 9.2% of GDP.  Suddenly the 2009-2011 deficit figures of 10%, 8.9%, and 10.9% don’t look nearly as bad for Obama.

“Nor is it exactly obvious,” continued McArdle, “to look at the $2.4 trillion in additional debt incurred during Bush’s eight-year presidency, and say that he is nonetheless actually responsible for $7 trillion of our current debt load–and then turn to the $3.1 trillion of debt incurred during Barack Obama’s three-year presidency, and declare that his policies are actually responsible for only $1.4 trillion.”

This is where I decided McArdle must be putting us on.  What isn’t obvious is how you get $2.4 trillion incurred by Bush.  By my count, you have to stop the meter the very day he left office, as if Obama should get all credit or blame for every dollar spent after he was inaugurated.  This is absurd, and McArdle almost certainly knows better; the budget for fiscal 2009 (October 2008-September 2009) was passed into law 10 months before Obama took office; to assign responsibility for deficits during this time is quite a stretch, but that’s what McArdle apparently does.

If we take a more reasonable approach, that presidents’ responsibility began with the first budget passed after they take office, Bush gets FY2002-FY2009 (less $113B stimulus), and Obama gets FY2010-FY2017 (plus $113B stimulus).  So Bush’s deficits were $3.43 trillion, and Obama’s through July were $2.66 trillion, based on 3/4 of the $1.645 trillion estimated FY2011 deficit.

There’s not a lot of good in any of this.  But the notion that the White House is overstating its case, that the recession and pre-existing government policy weren’t the cause of most of the Obama-era deficits, simply can’t be supported using the facts.

Which is why McArdle needed to generate statistics that might be facts, but aren’t, to match her conclusion.

—–

http://www.aei.org/docLib/Brill-Stimulus-Testimony-Oversight.pdf

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Written by David Clayton

August 2, 2011 at 12:16 am

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