Nobody From Nowhere (@i8dc)

Occasional Common Sense

Checking the Fact Checker – Debt By President Edition

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Today Post Fact Checker Glenn Kessler takes on debt accumulated by President and comes up a bit short. He appropriately uses debt as a percentage of GDP, but he doesn’t pick logical beginning and end dates for each President’s tenure.

For example, to determine Reagan’s contribution to the national debt, Kessler uses the figures as of the end of government fiscal year (FY) 1980 and 1988.  But this is not a fair way to come up with these numbers, because of two problems, one obvious and one more subtle.

The obvious problem is that the FY ends on September 30, not December 31.  A president can’t possibly be held responsible for changes in the debt that occur between September 30 and his inauguration on January 20.  For example, Obama entered office close to 4 months after FY 2008 ended.  Certainly it makes no sense to assign to Obama the $500 billion of debt accumulated between September 30, 2008 and January 20, 2009.  And because GDP dropped dramatically in the 4th quarter of 2008, debt/GDP increased by close to five percentage points between the end of FY 2008 and Obama’s inauguration.

The more subtle problem is one of influence.  When a president enters office, the government is close to one-third of the way through a FY, with a budget in place.  The new administration can only modestly change the course of the government immediately; to effect significant change, the new administration has to get laws passed.  In terms of things that affect the deficit, this generally means proposing a budget for the next fiscal year.

Using the beginning of the FY following inauguration is the most reasonably point to change responsibility between Presidents.  Reagan signed budgets for FY 1982-1989, so these should be the FYs under his name in the ledger.  It is somewhat arbitrary, but no more so than any other measure I know.  And in the case of Obama, it doesn’t pin to him the deterioration of the economy through the first eight months of his administration, with which I think reasonable economists would agree.

How does this change affect Kessler’s numbers? Enormously.

President

Kessler

VR

Reagan

+14.9

+14.8

Bush I

+7.1

+8.7

Clinton

-13.4

-16.8

Bush 2

+5.6

+21.0

Obama

+24.6

+11.5

This doesn’t quite give a complete picture, because an incoming administration does have some ability to modify spending and tax revenue during its first 8 months in office.   For example, 2009’s ARRA (the stimulus) affected both tax revenue and spending.  Similarly, the 2001 tax cut likely had some revenue impacts during FY2001.   So a more careful accounting would tweak these numbers a bit, but not much.

All of the data here use Kessler’s sources.

Oh yeah, and nothing here should be taken as defending the chart Kessler’s criticizing.  It’s awful.

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Written by David Clayton

September 29, 2011 at 8:07 am

Posted in Debunkery, Punditry

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