Imagine someone reading The Washington Post today and coming across this chart cooked up by liberal columnist Ezra Klein and a liberal think tank:
Why, our imagined reader might assume that the George W. Bush administration racked up $5.1 trillion in debt during his eight years in office, while the Barack Obama administration, assuming a two-year term as Klein does, would compile just under $1 trillion.
They would be wrong, of course. Gross federal debt, as Klein notes in the accompanying story, has already risen by $4.7 trillion during Obama’s first three years in office. And over the next five years, it will likely go up another $5 trillion or so, according to both the Congressional Budget Office (alternate fiscal scenario) and the Office of Management and Budget. So by my math, that’s $9.7 trillion in added Obama debt vs. $5.1 trillion for Bush.
But Klein believes Obama, the American president, should be absolved of any blame for those massive deficits, beyond the $983 billion. Why? Because his new policy initiatives, as the chart indicates, only add up to a tenth of the total debt that will likely be added under his watch:
How much has Obama added to the debt, anyway? There are two answers: more than $4 trillion, or about $983 billion. The first answer is simple and wrong. The second answer is more complicated but a lot closer to being right.
First of all, Obama wants to extend the Bush tax cuts for the the middle class, estimated to “cost” nearly $3 trillion over ten years. So you should add $1.5 trillion or so to Obama’s tab using Klein’s fiscal logic. Now we’re up to $2.5 trillion. And Klein also gives Obama credit for $500 billion in budget cuts—via the Budget Control Act—that would not be scheduled to occur without the debt ceiling fight with the GOP. But that’s all really beside the point. Let’s pretty much take the chart as is.
What Klein forgets is that Obama isn’t helpless here. He’s not a victim. There’s nothing stopping him from proposing deep spending cuts to reduce the continuing deluge of debt. The true cost of Obama’s fiscal policies isn’t just what he proposes but what he doesn’t propose. What is the cost of Obama’s decision to reject the findings of his own debt panel? If the Bowles-Simpson plan kicked in this year, projected deficits would fall by $3 trillion through the end of Obama’s second term. Should the president not be blamed for that, blamed for not leading, blamed for not ever proposing a long-term budget plan like Representative Paul Ryan has?
And if budget deficits are made worse by the economy’s continuing underperformance, should Obama also not bear some measure of responsibility for that, too? Recall that Vice President Joe Biden said the trillion-dollar stimulus would “literally drop kick us out of the recession.” But in the new book “Money Well Spent? The Truth Behind the Trillion-Dollar Stimulus, the Biggest Economic Recovery Plan in History,” ProPublica reporter Michael Grabell concludes that “the stimulus ultimately failed to do what America expected it to do — bring about a strong, sustainable recovery. The drop kick was shanked.”
If only the cost of Obamanomics were a mere $983 billion. That would be the bargain of the century.
In my view, the most heroic assumption in Klein’s analysis is that the addition of the 2009 Obama health care entitlement (aka- ObamaCare) will reduce the deficit by $123 Billion by 2017…
Should the president not be blamed for that, blamed for not leading, blamed for not ever proposing a long-term budget plan like Representative Paul Ryan has?
Silly economist, blame is for Republicans, not demigods.
Since Obama had supermajorities in Congress and could have enacted whatever policy he chose, he is responsible for the whole thing, what he enacted and what he decided he would continue.
Memo to WaPo: Fact-checking should begin at home.
How Obamanomics Works
It is a slow day in a damp little country town. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit.
On this particular day a rich tourist is driving through town, stops at the local hotel and lays a $100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night in. The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the $100 note and runs next door to pay his debt to the butcher. The butcher takes the $100 note and runs down the street to repay his debt to the pig farmer. The pig farmer takes the $100 note and heads off to pay his bill at the supplier of feed and fuel. The guy at the Farmers’ Co-op takes the $100 note and runs to pay his drinks bill at the pub. The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him “services” on credit. The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the $100 note. The hotel proprietor then places the $100 note back on the counter so the rich traveller will not suspect anything. At that moment the tourist comes down the stairs, picks up the $100 note, states that the rooms are not satisfactory, pockets the money, and leaves town.
No one produced anything. No one earned anything. However, the whole town is now out of debt and looking to the future with a lot more optimism.
And that, Ladies and Gentlemen, is how Obamanomics works.