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View Diary: Obama vs. Bush - A Comparison of Debt/Deficit Creation (55 comments)

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  •  Neither of your links proves your point (0+ / 0-)

    I cited to http://www.usgovernmentspending.com/... this source that shows very clearly that in 2007, the federal deficit as a percentage of GDP was 1.14%, barely a tenth of what it is now.

    You cite to a couple of sources that don't even focus on this question.

    •  Keep going.... (0+ / 0-)

      The govt data source deals with our DEBT levels (i.e., the amount of bonds we sell to interested parties, which give us cash today in return for repayment in the future--like a loan).

      The Cato Institute article is talking about DEFICITS (i.e., the difference between revenues (i.e., taxes + tariffs) and our bills).

      Here is a look at what caused the Obama deficit problem:

      http://www.nytimes.com/...

      As you can see here in the small box, Bush was running deficits from 2004 until he left office. The huge spike downward at the end for Obama is explained in the larger graphic.

      http://www.nytimes.com/...

      You wrote, "[Lower deficits] in fact happened" when this is clearly not true. Bush ran deficits for the last four years of his administration, squandering Clinton's surpluses and placing our nation in a precarious position with little slack to help itself through fiscal policy in times of duress.

      •  Did you even go to my link? (0+ / 0-)

        It says very clearly at the top of the graph:

        US Federal Deficit as a Percent of GDP

        Why do you then dismiss it as "debt"? Makes no sense.

        And yes, Bush ran deficits for not just the last four years of his administration -- he ran them for every year of his administration except the first -- 2001.

        The point, however, if you bother to read the chart or my original comment, is that after he passed the tax cuts, the last of which took effect in 2004, the deficit actually went down as a percentage of GDP, from 3.48% in 2004 to 1.14% in 2007.

        The New York Times article misses the point, which is the argument that tax cuts encourage economic growth. Blaming the economic downturn for the Obama deficits is circular. The theory, at least, is that if he were to cut spending and make the Bush tax cuts permanent, that we would be seeing economic growth, enough presumably to more than make up for the lost revenues owing to a decrease in tax rates.

        •  I was referring to MY links, which you slammed (0+ / 0-)

          as not referring to the topic at hand.

          If you recall, you wrote "Neither of your links proves your point" in a comment of the same name, and then wrote "You cite to a couple of sources that don't even focus on this question."

          I was responding (naturally) to your criticism of my links. That would be a logical response when you are insisting that they don't even focus on this question and that they do not prove my point.

          To repeat, my first link is for DEBT. My second is for DEFICITS. The subsequent NYT article was also for DEFICITS.

        •  Theory vs. reality (0+ / 0-)

          >The theory, at least, is that if he were to cut spending and make the Bush tax cuts permanent, that we would be seeing economic growth, enough presumably to more than make up for the lost revenues owing to a decrease in tax rates.<</p>

          Theory vs. reality. This is the argument used by Reagan and completely debunked by David Cay Johnston in "Perfectly Legal." (http://www.amazon.com/Perfectly-Legal-Campaign-Benefit-Everybody/dp/1591840198)

          Tax revenues grew much more quickly in the 1990s, when taxes were raised, than in the 1980s, when taxes were cut. Further, the Treasury Dept’s own analysis of the Bush tax cuts concluded that, even under favorable assumptions, the tax cuts would generate added growth that would offset no more than 10 percent of their long-term costs.
          Source: http://www.cbpp.org/...

          That cost is estimated at $2.4 trillion in only ten years, and we certainly did not have an increase in tax revenues in the past decade of over $2.4 trillion. (Source: http://www.taxpolicycenter.org/...

          As for your link, yes, I did look. It's nothing new. Yes, the deficit is the largest it has been since FDR as a % of GDP. Is this really surprising?

          We're in Great Depression II, wherein the unemployment / underemployment rate for the bottom decile of earners is over 50% and for the second lowest decile is at over 35% (Source: http://www.clms.neu.edu/... Forty percent of the world's wealth evaporated, according to BW. And we have a frozen banking system that is making it difficult for firms to make payroll and accounts payables.

          We SHOULD have the highest deficits since the Great Depression, and Obama's SPENDING is not responsible for that, as I documented above (completely ignoring any savings that may come about from the Health Care Bill).

          This is a very good read, btw:
          http://www.huppi.com/...

          •  And thus we're back to the circular argument (0+ / 0-)

            Yes, the deficits are high because the economy sucks. The question is whether or not the economy is an independent variable relative to the deficit (or more specifically government spending and tax rates), and if not, what is the relation -- positive or negative.

            Your link presents some good arguments for a positive relationship -- more taxes, more spending, more growth. I think you'd have to at least acknowledge that there are plenty of pretty smart people who believe that lower taxes and lower government spending equals more growth.

            •  Politicians not economists make those claims (0+ / 0-)

              No Bush Administration economist ever claimed that tax cuts paid for themselves....

              In the 2003 Economic Report of the President, CEA wrote that "[a]lthough the economy grows in response to tax reductions... it is unlikely to grow so much that lost tax revenue is completely recovered by the higher level of economic activity."

              During his 2003 Senate confirmation hearings to replace Hubbard as CEA chair, Greg Mankiw was asked about Club for Growth president Stephen Moore's opposition to his nomination. Mankiw responded that Moore was criticizing "a passage [in Mankiw's writing] where I had raised skepticism about claims that tax cuts would generate so much employment growth as to be completely self-financing. And I remain skeptical of those claims."

              A Treasury Department analysis contained in the Office of Management and Budget's 2006 Mid-Session Review concludes that the tax cuts will not pay for themselves in even the most optimistic scenario. As the Center on Budget and Policy Priorities writes, Treasury found that "making the President's tax cuts permanent — and paying for the tax cuts with future reductions in spending — may ultimately increase the level of economic output (national income) in the long run by as much as 0.7 percent... Even if an increase in the level of economic output of 0.7 percent ultimately were to result from making the tax cuts permanent, the effect of this assumed additional economic growth would be to offset only a tiny fraction of the cost of the President's tax cuts."

              CEA Chair Ed Lazear told the Washington Times in September 2006 that "We do not say that the tax cuts pay for themselves."

              Robert Carroll, deputy assistant Treasury secretary for tax analysis under Bush, "said neither the president nor anyone else in the administration is claiming that tax cuts alone produced the unexpected surge in revenue. 'As a matter of principle, we do not think tax cuts pay for themselves,' Carroll said."

              Source: http://www.brendan-nyhan.com/...

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