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Home > Politics
Bush Deficits Blamed on Obama: Deficit & GDP Data
by Bob Powell, 10/19/12
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Summary: Data shows that deficits are greater under Republican presidents than under Democratic presidents. Deficits increased drastically under Bush. The deficit for fiscal 2012 is 32% lower than Bush's last budget year, 2009. As of Sep 12 employment has increased 68% of the way back to what it was in Nov 2007 at the beginning of the Great Recession.

Here's the problem. The story on the economy being presented by so-called "conservative" Romney supporters is false. Here's an example of the triumph of propaganda over reality:

"Fact: Bush created a huge mess… he is a Republican.
Fact: Obama has made it far worse. He is a Democrat."

Such certainty is amazing in the face of data that shows the latter "Fact" is not true at all. I provide links to allow anyone to check the data and graphs. Don't believe me, go at it.

Here's a column by Bruce Bartlett, who worked for Reagan, that also explains how Obama's spending has not been the problem: Who’s the Biggest Spender? Obama or Bush? Hint, it's not Obama.

The problem in the United States is that voters like the one above will cling to false beliefs even after they're shown to be wrong. And that's why the economy fails under Republicans and will devastatingly fail if Romney gets a chance to double down on Bush's policies. And don't doubt that that's the case because his advisors were Bush's advisors: economic advisors and foreign policy advisors.

Here's what Romney said about Obama's record in the second debate on October 16, 2012:

... we have his own record, which is we have four consecutive years where he said, when he was running for office, he could cut the deficit in half. Instead, he's doubled it.

We've gone from $10 trillion of national debt to $16 trillion of national debt. If the president were re-elected, we'd go to almost $20 trillion of national debt. ... and ...

President Obama ... said that that was outrageous to have deficits as high as half a trillion dollars under the Bush years. He was right. But then he put in place deficits twice that size for every one of his four years ...

Let's examine this.

Obama was inaugurated on January 20, 2009 and fiscal years end in September of each year. There's no way any president can take actions to significantly affect the nation's economy in the 8 months from February through September. For this reason the performance of the economy up to September of a new president's must be attributed to the previous president.

So here's the data on the deficit (change in debt) in trillions of $ from treasurydirect.gov: Yearly Monthly

Sep-00: $0.02 T
Sep-01: $0.13 T
Sep-02: $0.42 T ... Bush immediately more than tripled the deficit from Clinton's last budget.
Sep-03: $0.55 T
Sep-04: $0.60 T
Sep-05: $0.55 T
Sep-06: $0.57 T
Sep-07: $0.50 T ... Bush's average 03 - 07 was $0.53 T
Sep-08: $1.02 T
Sep-09: $1.89 T ... By 2009, Bush increased the deficit to 3.5 times the average of his first 6 years
Sep-10: $1.65 T ... Obama *reduced* the deficit to 88% of Bush's last budget year
Sep-11: $1.23 T ... down to 66%
Sep-12: $1.28 T ... down to 68% ... 32% LESS, and certainly not "doubled" as Romney said.

Yes, the deficit's not cut in half, it's only fallen to 2/3 of what it was for Bush's last budget year. It's certainly not doubled as Romney said.

__________________________________________

On James K. Glassman's commentary in Forbes

In an impressive example of how to lie with statistics, James K. Glassman's commentary in Forbes, The Facts About Budget Deficits: How The Presidents Truly Rank, shows averages for deficit/GDP. Given that the numbers he presents are incorrect -- I've doubled checked -- and that he uses averages to hide Bush's soaring deficits at the end of his last budget years, the "truly" in the title of his commentary is particularly brazen. In any case, below are his numbers and mine.

[My calculations use both deficits and GDP by fiscal year; his probably use GDP by calendar year and deficits by fiscal year. I've done it both ways it makes little difference. I include deficit, GDP, and deficit/GDP by year at the end of this article and I have links to allow anyone to check the data and calculations. No need to redo all the calculations that took me days, just check a few numbers.]

Glassman's      My Calculation
President                Years          Deficit/GDP     Deficit/GDP
Ronald Reagan        1982-89       4.2%              5.5%
George H. W. Bush 1990-93        4.3%              6.3%
Bill Clinton              1994-01        0.1%              2.0%
George W. Bush      2002-09       3.4%              6.0%
Barack Obama        2010-12        8.7%              9.3%

Indeed, Obama's record looks worse, unless one examines Bush's first 6 and his last 2 years:
Bush 2002-07    4.4%           Bush 2008-09   10.3%

Bush immediately had a higher average than Clinton (4.4% vs 2.0%) over his first 6 years.
Bush had a higher average than Obama over Bush's last 2 years (10.3% vs 9.3%).

Glassman uses the trick of showing averages to obscure what Bush's record *truly* is. Very clever, but nevertheless Glassman fundamentally uses stastistics to lie about what happened.

Summary on Glassman: To make Bush's record appear much better than it really was, Glassman presents false data. In addition, he uses averages over Bush's whole term to hide the fact that Bush's deficits soared over the last two of his budget years; this deceives no matter what the numbers.
__________________________________________


So, it's impossible to not see that Romney and other Republicans are bald-faced liars. [Added 10/21/12: incredible video detailing many of Romney's lies: Mitt Lies Debate 1.]

Here's the graph of deficits/GDP for 6 presidents showing major events that affect the economy and that deficits are lower than their peak. GDP data is from the Bureau of Economic Analysis site.

Deficit to GDP in percent showing major events affecting the economy. Deficits/GDP rose drastically under Bush to almost twice even Reagan levels and have declined under Obama

Debt at the end of Bush's last fiscal year, 2009, was $11.91 T, not $10 T as Romney said. Busjh's debt was $10.0 T the year before that.

 

It is true that debt is $16.0 T at the end of 2012 and that, if the deficit remains as it is in 2012, $1.28 T, total debt will be $22.5 T by the last of Obama's 8 budget years. That's bad, but that's not Obama's plan.

That's only if Republicans prevent taxes from going back to Clinton's levels by letting the Bush tax cuts expire. And that's only if Republicans can continue to succeed in blocking legislation that would improve the economy, which is exactly what they've been doing:

Obstruct and Exploit by PAUL KRUGMAN, September 9, 2012

... Think of it as a two-part strategy. First, obstruct any and all efforts to strengthen the economy, then exploit the economy’s weakness for political gain. ...

Note: This is the same point I make in my page on Fiscal Deficits! Who's Responsible? on record Republican filibusters.

 

So why would deficits continue to be as high as they are? The graph below, based on Congressional Budget Office projections, shows the sources of deficits.

Causes of fiscal deficit.: The chart assumes national policy as of a year ago [2011} would be renewed. Thus, they dont reflect expected peace dividends from the Iraq and Afghanistan wars, or revised economic growth projections, and it assumes the Bush tax cuts will be renewed in their entirety something President Obama has vowed will not happen, after he accepted a two-year extension of all the rates late 2010. But they broadly demonstrate that existing debt and projected deficits arent largely a consequence of Obama initiatives.

The Republican-created economic downturn and spend & borrow policies drastically increased deficits. The major list: unpaid-for Bush tax cuts ($1.8T), illegal invasions & occupations in Afghanistan and Iraq (>> $1T ... there are estimates of $5T by the time they're ended; see 9/11 and the $5 Trillion Aftermath), Medicare Part D with no-competition prescription drug industry gifts (~$1T), the TARP bank bailout ($700B), and the economic downturn explain virtually the entire deficit over the next ten years. And interest on this debt is the gift that keeps on giving.

As Krugman's column points out, Republicans are doing everything in their power to prevent the economy from recovering. Obama is responsible to the extent that he foolishly went along with Republicans in extending the Bush tax cuts; and he didn't end the wars immediately as many of those who voted for him wanted. He's not a "socialist"; he acts like what used to be a moderate Republican.

The Medicare Part D prescription drug fiasco

While the details are somewhat of an aside, what happened for the Medicare Part D prescription drug benefit is emblematic of, and an extremely stark example of, Republican distain for balanced budgets. Here are excerpts from a column in Forbes by Bruce Bartlett, who served as a domestic policy adviser to President Ronald Reagan and as a Treasury official under President George H. W. Bush. You've really got to read this.

Republican Deficit Hypocrisy [excerpt]
Bruce Bartlett, 11.20.09, Forbes
Remember the Medicare drug benefit?

... What followed was one of the most extraordinary events in congressional history. The vote was kept open for almost three hours while the House Republican leadership brought massive pressure to bear on the handful of principled Republicans who had the nerve to put country ahead of party. The leadership even froze the C-SPAN cameras so that no one outside the House chamber could see what was going on.

Among those congressmen strenuously pressed to change their vote was Nick Smith, R-Mich., who later charged that several members of Congress attempted to virtually bribe him, by promising to ensure that his son got his seat when he retired if he voted for the drug bill. One of those members, House Majority Leader Tom DeLay, R-Texas, was later admonished by the House Ethics Committee for going over the line in his efforts regarding Smith.

Eventually, the arm-twisting got three Republicans to switch their votes from nay to yea: Ernest Istook of Oklahoma, Butch Otter of Idaho and Trent Franks of Arizona. Three Democrats also switched from nay to yea and two Republicans switched from yea to nay, for a final vote of 220 to 215. In the end, only 25 Republicans voted against the budget-busting drug bill. (All but 16 Democrats voted no.)

Otter and Istook are no longer in Congress, but Franks still is, so I checked to see what he has been saying about the health legislation now being debated. Like all Republicans, he has vowed to fight it with every ounce of strength he has, citing the increase in debt as his principal concern. "I would remind my Democratic colleagues that their children, and every generation thereafter, will bear the burden caused by this bill. They will be the ones asked to pay off the incredible debt," Franks declared on Nov. 7.

Just to be clear, the Medicare drug benefit was a pure giveaway with a gross cost greater than either the House or Senate health reform bills how being considered. Together the new bills would cost roughly $900 billion over the next 10 years, while Medicare Part D will cost $1 trillion.

Moreover, there is a critical distinction--the drug benefit had no dedicated financing, no offsets and no revenue-raisers; 100% of the cost simply added to the federal budget deficit, whereas the health reform measures now being debated will be paid for with a combination of spending cuts and tax increases, adding nothing to the deficit over the next 10 years, according to the Congressional Budget Office. (See here for the Senate bill estimate and here for the House bill.)

Maybe Franks isn't the worst hypocrite I've ever come across in Washington, but he's got to be in the top 10 because he apparently thinks the unfunded drug benefit, which added $15.5 trillion (in present value terms) to our nation's indebtedness, according to Medicare's trustees, was worth sacrificing his integrity to enact into law. ...

If this isn't criminal behavior, it should be. Note: As it was finally passed the CBO Confirms: The Health Care Law Reduces the Deficit. Also see Budget office: Obama's health law reduces deficit at Bloomberg Business Week. AHA does not increase deficits as Republicans maintain.

Below is the same as the first graph without the clutter of major events that affected the economy.

This is the same Deficit to GDP graph without major events

This shows the fiscal deficit over time in trillions of dollars.

This shows the fiscal deficit in dollars increased under Bush and has fallen under Obama

And here's the fiscal deficit as a percent of debt.

Change in fiscal debt (fiscal deficit) as a percent of debt looks a lot like the fiscal deficit

Here's GDP over time.

Gross Domestic Product over time

And here's the change in GDP as a percent of GDP showing also major events that affected the economy to make it easier to see what's happened.

Change in Gross Domestic Product over time showing major events that would affect the economy. Reagan's defense-spending stimulus boosted GDP in 1984. GDP has recovered somewhat under Obama since Bush's Great Recession

In summary, when Republicans say Obama has made things worse, they are lying. That's shown not just by false statements about budget deficits, but also by the stock market and job growth.

Employment has only recovered 58% of the way back to what it was before the Great Recession, but it has improved. In Sept 2012, employment is 143.0M, up from 138.0M in Dec 2009. Employment was 146.6M in Nov 2007. See the data at BLS Table A-1. Here's the chart:

Employment in thousands from Jan 2006 through Sep 2012 from the Bureau of Labor Statistics

But never mind, those determined to vote for Romney will continue to deny reality and ignore facts and data.

Know that I am not a major Obama fan. I explain at this link that not balancing trade will cause even Obama's policies to fail. Too little, if anything, is being done to correct this now, but Republicans are absolutely rabid promoters of "free trade" policies that drive up the trade deficit, undermining GDP and jobs. I call it economic treason.

_________________________________________________

Detailed data on GDP and deficits by fiscal year

Deficit (change in debt) data from treasurydirect.gov.
GDP data from Bureau of Economic Analysis (have to add quarterly values to get fiscal year values).

President    Year    GDP    Deficit    Deficit/GDP   All Budget Years Avg
Carter       Sep-78   2.22    0.07       3.3%
Sep-79   2.50    0.05       2.2%
Sep-80   2.72    0.08       3.0%
Sep-81   3.06    0.09       2.9%     Carter      1978-81      2.8%
Reagan     Sep-82   3.22    0.14       4.5%
Sep-83   3.44    0.24       6.8%
Sep-84   3.84    0.20       5.1%
Sep-85   4.15    0.25       6.0%
Sep-86   4.40    0.30       6.9%
Sep-87   4.65    0.22       4.8%
Sep-88   5.01    0.25       5.0%
Sep-89   5.40    0.26       4.7%     Reagan     1982-89     5.5%
GHWBush Sep-90   5.73   0.38       6.6%
Sep-91   5.93   0.43       7.3%
Sep-92   6.24   0.40       6.4%
Sep-93   6.59   0.35       5.3%     GHW Bush 1990-93   6.3%

Clinton       Sep-94   6.98   0.28       4.0%
Sep-95   7.34   0.28      3.8%
Sep-96   7.72   0.25      3.2%
Sep-97   8.21   0.19      2.3%
Sep-98   8.66   0.11      1.3%
Sep-99   9.21   0.13      1.4%
Sep-00   9.82   0.02      0.2%
Sep-01  10.23  0.13      1.3%      Bill Clinton    1994-01    2.0%
GWBush    Sep-02  10.54  0.42      4.0%
Sep-03  10.98  0.55      5.1%
Sep-04  11.68  0.60      5.1%
Sep-05  12.43  0.55      4.5%
Sep-06  13.21  0.57      4.3%
Sep-07  13.86  0.50      3.6%  
Sep-08  14.33  1.02      7.1%
Sep-09  13.96  1.89     13.5%     GWBush      2002-09   6.0%
Obama      Sep-10  14.30 1.65      11.5%
Sep-11   14.93 1.23        8.2%
Sep-12   15.53 1.28        8.2%     Obama       2010-12   9.3%

Bush          2002-07                        4.4%
Bush          2008-09                      10.3%

 

Who Increased the Debt? by David Mikkelson, Snopes, 1/23/12
A chart from 2011 compared changes in the U.S. national debt over the last several presidencies.

This article points out that the chart is "Mostly True", but the issue is complicated. Read the article.


URL: http://www.exponentialimprovement.com/cms/bushdeficit.shtml

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