January 27th, 2015
The Truth About the President and the Deficit, Part Three
By Bob Cesca: There are two bits of Republican fiscal hooey that have been injected into the national debate since I posted a two-parter here about the party’s lies regarding the deficit and the debt. So now it becomes a three-parter.
Both items of aforementioned hooey are admittedly easy targets, so let’s start with the easiest of the two.
Karl Rove’s new Crossroads GPS commercial against the president is laugh-out-loud awful. It features a Mom reminiscing about watching her kids play basketball then, as soon as President Obama is elected, she evidently begins to rapidly age. Her hair gets shorter and her voice deepens as she describes how she once had “hope” but now her kids are still living at home because of the president’s economic policies.
Only Karl Rove could paint the dark ride of the Bush/Cheney years as an era of sparkly, Wonder Years-ish nostalgia. Ah yes, those two wars, Abu Ghraib, Hurricane Katrina, the worst terrorist attack in American history and the biggest economic meltdown since October 1929. The good ‘ol days. How I miss them.
But that’s not the worst part. The Rove commercial brings up the notion of “job-killing debt.” In addition to the apparent onset of premature menopausal symptoms and layabout 20-somethings living with their parents, the president is evidently responsible for the cumulative sum of the national debt as its inexplicable “job-killing” nature.
Let’s put this bluntly. There’s no measure in the history of American economics that positively correlates a high national debt with fewer jobs. The two concepts — high unemployment and high debt — are almost entirely unrelated. The opposite, however, is true. Usually during periods of high debt, job creation is rather robust. Ronald Reagan doubled — yes, doubled — the debt during his first term and unemployment dropped from around 11 percent to close to 7 percent by the time his second term began. Strangely enough, President Obama’s debt/unemployment record is almost exactly the same. In convenient chart form:
You’ll notice that Reagan’s unemployment numbers spiked midway through his first term and subsequently dropped more rapidly, but the curves are remarkably similar. Additionally, President Obama faced a significantly deeper recession with the economy hemorrhaging 800,000 jobs per month when he was inaugurated. The alleged “malaise days” of the Carter years were a blast compared with 2008-2009.
Whatever your Republican friends might say about the evils of government spending, one this is always — always! — true. High government spending creates jobs. The opposite is almost never true, except, in a way, for the Bush years. The deficit and the debt skyrocketed out of the Clinton surplus almost entirely due to Bush’s unprecedentedly enormous tax cuts. And what happened? Job creation flatlined. Economic growth was choppy and eventually collapsed. That’s because tax cuts are a terrible way to stimulate growth and job creation. But if the government injects more money into projects, infrastructure and, yes, even defense spending, jobs are inevitably created. When the government cuts taxes for rich people, rich people usually just pocket the dividend and continue about their usual spending patterns. Indisputable fact. Here’s a chart illustrating the stimulative effects of various government fiscal measures.
So “job-killing debt” is a concept that Rove made up. It doesn’t exist. But it feels like it does to low information voters — mostly Republican voters who, for one reason or another, want the president to fail.
* * *
The second item of Republican hooey this week comes to us from USA Today and a brief (everything in USA Today is brief) item by Dennis Cauchon titled “Real federal deficit dwarfs official tally.” The article calculated the deficit to include spending for Social Security and Medicare — two areas that usually aren’t included in government deficit calculations. The result? The so-called “real” deficit for 2010 was $5.6 trillion and $5.0 trillion for 2011, according to an outfit called The Institute for Truth in Accounting, which is so obsessed with the debt, they’ve included a real-time debt clock at the top of every page of their site.
2010 and 2011 were the only two years presented in the article. So, in a vacuum, the numbers seem huge. But what do fluctuations in the “real” deficit look like across a longer span of time — say, 30 years or so? We don’t know because they don’t tell us, but it’s fair to conclude that they’ve fluctuated in similar ways to the official budget deficit numbers, only higher.
Conservative wingnut sites like Newsmax and Hot Air picked up the story and right-wing commenters at various blogs are crapping their cages over these figures. Naturally, they don’t know what the “actual” deficits were under Republican administrations as points of comparison. And, more importantly, they utterly failed to realize that, if accurate, President Obama reduced the “real” deficit by $600 billion from 2010 to 2011.
But the numbers are presented by conservatives as if President Obama personally increased the deficit from the lower calculation to the “real” calculation — making it seem like the deficit quintupled (or worse) from the end of the Bush administration to now. Or, say, from around $400 billion in 2008 to — BOOM! — $5.6 trillion in 2010. Apples to oranges, in other words, when, in fact, the “real” deficits for the Bush years were similarly higher as well.
Lesson? To paraphrase Dirty Rotten Scoundrels, don’t let Republicans take the cork off their fiscal forks. They could hurt themselves. And others.
More on the Banter:
January 26th, 2015
January 26th, 2015
January 26th, 2015