D is for Deficit Hawks

Monday night’s St. Rachel Maddow Show featured a couple of graphs that need wide distribution.

As background, an ABC/Washington Post poll found that the only category Barack Obama was deficient in among polled registered voters was on the issue of the deficit:

Romney, by this poll, has a three point advantage on “dealing with the federal budget deficit,” despite the fact that his proposals would actually increase the deficit. People just naturally think Republicans are better budget hawks than Democrats, I suppose.

But here is reality from St. Rachel:

That red chunk is the budget deficit inherited by President Obama. So, you can see that he has actually reduced the deficit since he’s been in office, despite Republican claims to the contrary and despite the economic travails we have been through that required a lot of government spending to keep the economy above water.

And here is a larger picture of Democratic performance vis-à-vis deficit spending:

There’s a lot of Republican red above the ZERO line in that graph, no? Democrats—you can believe your eyes—are far, far better stewards of the budget than Republicans.

And that will be true no matter how many lies Republicans tell voters.


I don’t want to say a lot of Tea Party Republicans are delusional, but I have to.

I was sent an email this morning alerting me to a new article on Tea Party Nation. The article began with this:

I actually pity the Democratic Party these days even though I think it has brought the nation to ruin because, as Joseph Curl recently noted in a Washington Times commentary, “Democrats must spend, spend, spend, and spend. It’s in their DNA.”

Hmm. If spending is in Democratic DNA, somehow Democrats must have impregnated George W. Bush with it. And somehow they must have fornicated with the Republicans in Congress during Bush’s first six years in office and deposited a big wad of that spending DNA, which then produced big, fat deficit babies.

Because under W. Bush and his Republican Congress—who inherited budget surpluses—we saw nearly unprecedented spending. And you don’t have to take my word for it:

During his eight years in office, President Bush oversaw a large increase in government spending. In fact, President Bush increased government spending more than any of the six presidents preceding him, including LBJ.  In his last term in office, President Bush increased discretionary outlays by an estimated 48.6 percent.

During his eight years in office, President Bush spent almost twice as much as his predecessor, President Clinton.  Adjusted for inflation, in eight years, President Clinton increased the federal budget by 11 percent. In eight years, President Bush increased it by a whopping 104 percent. 

Now, that wasn’t written by me or Barney Frank, but by Veronique de Rugy.  Here is her bio:

…a senior research fellow at the Mercatus Center at George Mason University. She was previously a resident fellow at the American Enterprise Institute, a policy analyst at the Cato Institute, and a research fellow at the Atlas Economic Research Foundation…She writes a column for Reason magazine and is a regular contributor to The American, AEI’s  online magazine. She also blogs at The Corner at National Review Online and at Big Government.

You can see that she has some conservative chops. Here’s more:

Between FY2002 and FY2009, discretionary spending rose 96 percent…

Some argue that federal spending during the Bush years was so high because security needs drove up the budget… Whether this is true, the overall rapid rise of discretionary spending indicates that, here too, the administration and Congress made no trade-offs in the budget. If the administration and Congress wanted more security spending and wanted to be fiscally responsible, they should have found savings elsewhere in the budget.

Wanted to be fiscally responsible“? Republicans?

Still more:

President Bush added thousands of new federal subsidy programs during his eight years in office. In 2008, there were 1,816 subsidy programs in the federal budget that spread hundreds of billions of dollars annually to special interest groups such as state governments, businesses, nonprofit groups, and individuals. The number of subsidy programs has grown by 30 percent since 2000 and by 54 percent since 1990.

Let’s turn to another source, this time McClatchy Newspapers:

George W. Bush, despite all his recent bravado about being an apostle of small government and budget-slashing, is the biggest spending president since Lyndon B. Johnson. In fact, he’s arguably an even bigger spender than LBJ.

“He’s a big government guy,” said Stephen Slivinski, the director of budget studies at Cato Institute, a libertarian research group.

The numbers are clear, credible and conclusive, added David Keating, the executive director of the Club for Growth, a budget-watchdog group.

“He’s a big spender,” Keating said. “No question about it.”

Most of you know that the Cato Institute and Club for Growth are hard-core right-wing institutions, but somehow the memory of big-spending Republicans has faded and a delusion fathered by hatred of Barack Obama has taken hold of many minds on the right.

Besides the defense buildup and Homeland Security spending under Bush and the Republicans, here’s more:

Brian Riedl, a budget analyst at the Heritage Foundation, a conservative research group, points to education spending. Adjusted for inflation, it’s up 18 percent annually since 2001, thanks largely to Bush’s No Child Left Behind act.

The 2002 farm bill, he said, caused agriculture spending to double its 1990s levels.

Then there was the 2003 Medicare prescription drug benefit — the biggest single expansion in the program’s history — whose 10-year costs are estimated at more than $700 billion.

And the 2005 highway bill, which included thousands of “earmarks,” or special local projects stuck into the legislation by individual lawmakers without review, cost $295 billion.

“He has presided over massive increases in almost every category … a dramatic change of pace from most previous presidents,” said Slivinski.

And all that is without even considering the cost of the Bush tax cuts, which are still with us and—along with other Bush-initiated spending—still doing fiscal damage that Obama and the Democrats are getting blamed for.

Let’s go back to that delusional Tea Party Nation article and read that first paragraph again:

I actually pity the Democratic Party these days even though I think it has brought the nation to ruin because, as Joseph Curl recently noted in a Washington Times commentary, “Democrats must spend, spend, spend, and spend. It’s in their DNA.”

There. I feel better.

Mitch McConnell: No New Taxes, Take It Or Leave It

It’s clear from the election last year, we will not be raising taxes,” Republican leader Senator Mitch McConnell said this morning on Morning Joe. He was responding to a question about the budget.

That unequivocal statement is why, my friends, the battle will go on.  Until the GOP leadership moves off that position, nothing of substance will happen.  I hope.  Democrats, especially President Obama, haven’t exactly shown themselves to be competent negotiators.

McConnell also said, when asked why the Republican Party doesn’t take the lead with regard to entitlement reform, that it was because “I’m not the President.”  He said he has told President Obama both publicly and privately that divided government is the time to get something done and, “We’re ready to go.”

Ready to go? Hardly. Oh, they’re ready to go on spending cuts. If Democrats let them, radical Tea Party Republicans will suck the marrow out of the budget. But responsibly raising taxes to pay for the government people say they want? Not a chance, McConnell said.  That’s some compromise offer.  If Democrats agree in any way to this bargain, they deserve permanent exile.

McConnell used the example of the Reagan-O’Neill compromises in the 1980s and, most egregiously, the Clinton and congressional Republican compromises in the 1990s that led to budget surpluses as examples of how things can get done during times of divided government.

Except, naturally, McConnell ignored one teeny, tiny, tittle of a fact.  What he doesn’t mention, and Democrats shouldn’t let him ignore, is that in 1993, Clinton and the Democrats raised taxes responsibly to pay for government. Imagine that. Asking the American people to pay for the government they have voted for over the years. How novel that sounds today.

That law, known widely as the Deficit Reduction Act of 1993, received exactly ZERO Republican votes. ZERO. And what followed that responsible legislation was years of prosperity and job growth.

The GOP confirmed its fiscal irresponsibility via the infamous cuts in 2001 and 2003 that essentially repealed the 1993 law and set us back on the road to massive deficit spending.  And if Democrats let the Tea Party have its way, the home-bound chickens from that malgovernance will roost in a much smaller and less effective government hen house.

As I said, if Democrats yield to the my-way-or-no-way Republicans, led by anti-government teapartiers, then the Democratic Party deserves the dissolution it most surely will suffer.

The National Debt: Let’s At Least Ask Who Dunnit

My friend Juan Don has turned me on to a chart created by Franklin “Chuck” Spinney, who used to be a budget analyst for the Pentagon and who is famous for criticizing what Wikipedia calls, “the reckless pursuit of costly complex weapon systems by the Pentagon, with disregard to budgetary consequences.”

About the painful choices that will soon have to be made relative to our present revenue and spending imbalance, Spinney asks:

So, as a first cut into a complex issue, perhaps it is time for the angry masses to ask which political party put them into the fiscal straight jacket that is setting them up for this horrible choice?

Here’s the chart that serves as that “first cut into a complex issue”:

James Fallows posted Spinney’s chart on The Atlantic website, and here is the explanation:

To be clear: the middle column is how much overall federal debt grew, or shrank, as a share of gross domestic product during each administration, and the right-hand column is the average annual rate of growth or reduction during that administration. As Spinney said in a note to me, “The idea of this column is simply to show the average annual change for the period covered in the first column — so you can compare one term administrations to two term administrations in terms of their annual performance.  The first row of the second column says, for example, that the average debt burden ratio declined by 4.7% during each year of the Truman administration.”

When the economy is growing faster than the debt, that administration looks “green.” When it isn’t, red. The chart may give a slightly unfair boost to Harry Truman, whose administration coincided with the end of huge outlays and borrowing for World War II. Otherwise…

How To Think About Our Economic Troubles

Bear with me, but the following is sort of dense and difficult to absorb, but I believe it is essential in understanding what to do about the state of our (and the world) economy, beyond the “cut spending at all costs” meme dominant today:

David Stockman, Republican Ronald Reagan’s budget director, said this on 60 Minutes last night, when asked by Leslie Stahl what he meant by “Tax cutting is a religion“:

Well it’s become in a sense an absolute. Something that can’t be questioned, something that’s gospel, something that’s sort of embedded into the catechism. And so scratch the average Republican today and he’ll say “Tax cuts, tax cuts, tax cuts.” It’s rank demagoguery. We should call it for what it is. If these people were all put into a room on penalty of death to come up with how much they could cut, they couldn’t come up with $50 billion, when the problem is $1.3 trillion. So, to stand before the public and rub raw this anti-tax sentiment, the Republican Party, as much as it pains me to say this, should be ashamed of themselves.

However, Stockman doesn’t just criticize Republicans for their demagoguery:

We have now got both parties essentially telling a Big Lie. With a capital ‘B’ and a capital ‘L’ to the public: and that is that we can have all this government—24 percent of GDP, this huge entitlement program, all of the bailouts—and yet we don’t have to tax ourselves and pay our bills. That’s delusional.

It is delusional, if Democrats are determined, like Republicans, to make the tax cuts permanent, forever and ever.  Americans of all income groups are taxed less today than in 1982, the beginning of the age of hyper-deficit spending.  And despite David Stockman’s role in that unfortunate age, he is willing to admit that the tax cut hysteria is wrong.  It is wrong arithmetically and it is wrong morally, given all that needs to be done in our country.

But because of the slow economic recovery, the answer is not to raise taxes on all Americans right now, when there is still some risk of a return to the 2008-2009 decline or worse.  Extending the Bush tax cuts on all incomes up to $250,000 is the prudent thing to do for the next couple of years, until we are safely removed from the threat of economic regression.  It is a good bet that a large amount of that tax-cut money will get spent—it will circulate—and act as a stimulus for the economy as a whole.

But, as Paul Krugman has pointed out, the current opinion regarding the world’s economic situation is on the side of those who,

demand fiscal austerity from everyone; to reject unconventional monetary policy as unsound; and of course to denounce any help for debtors as morally reprehensible. So we’re in a world in which Very Serious People demand that debtors spend less than their income, but that nobody else spend more than their income.

Following that advice, Krugman argues, will result in a continuation of the economic slump, “a prolonged period of economic weakness that actually makes the debt problem harder to resolve.”

And here’s why:

The background to the world economic crisis is that we went through an extended period of rising debt. Now, one person’s liability is another person’s asset, so rising debt made the world as a whole neither richer nor poorer. It did, however, leave the borrowers increasingly leveraged. And then came the Minsky moment; suddenly, investors were no longer willing to roll over, let alone increase, the debts of highly leveraged players. So these players are being forced to pay down debt.

The process of paying down debt, however, must obey two rules:

1. Those who pay down debt must do so by spending less than their income.

2. For the world as a whole, spending equals income.

It follows that

3. Those who are not being forced to pay down debt must spend more than their income.

But here’s the problem: there’s no good mechanism in place to induce those who can spend more to do so. Low interest rates do encourage spending; but given the size of the debt shock, even zero rates are nowhere near low enough.

So since the world economy can’t raise the bridge, it is lowering the water: without sufficient spending from those who can, the only way to make the accounting identities hold is for incomes to decline — specifically, the incomes of those not constrained by debt must decline so as to create a sufficiently large gap between their (unchanged) spending and their incomes to offset the forced saving of debtors. Of course, the mechanism here is an overall global slump, so the debtors are squeezed as well, forced into even more painful cuts.

If you have followed this argument thus far (I have left out Krugman’s discussion of inflation as a mechanism for eroding debt obligations), you can guess the remedy:

To avoid all this, we’d need policies to encourage more spending. Fiscal stimulus on the part of financially strong governments would do it; quantitative easing can help, but only to the extent that it encourages spending by the financially sound, and it’s a little unclear what the process there is supposed to be.

Oh, and widespread debt forgiveness (or inflating away some of the debt) would solve the problem.

As I said, this stuff is a little hard to understand, and in some cases, digest. But the bottom line is this:

1. We need more spending to ensure we don’t go into another severe recession, or God forbid, a depression.

2. In the absence of, or in addition to, effective policies to increase private-sector spending, government spending by those governments strong enough to do it is vital for a stronger economic rebound.

3. The long-term debt needs to be addressed by adjusting government revenue to spending in a rational and sustainable way. (However, if Republicans have their way, spending will be adjusted to insufficient revenue.)

Pledging Republicans Can’t Escape Responsibility

I can’t let the day continue without a comment on the Republican Party’s latest “Pledge to America,” apparently necessary because numerous previous pledges the party made to the American people fell, shall we say, somewhat short of expectations.

Most of the people who will be waving around the newest pledge today—which, of course, is missing important specifics—we must not forget, were:

RESPONSIBLE for a decade-long decline in middle class well-being;

RESPONSIBLE for presiding over a record-breaking lack of job creation during the Bush years;

RESPONSIBLE for the wealthier getting wealthier during their governing tenure, even as the rest of the country lost ground and in some cases lost hope;

RESPONSIBLE for handing President Obama a $1.3 trillion annual budget deficit and a fast-sinking economy, as the Bush administration slinked out of Washington;

RESPONSIBLE for handing President Obama two protracted wars, funded on credit;

RESPONSIBLE for a deficit-funded Medicare Part D program that helped enrich pharmaceutical companies;

RESPONSIBLE for doing nothing about the rising costs of health insurance and the nasty practices of private insurers related to pre-existing conditions, rescission, and other unconscionable acts;

RESPONSIBLE for standing in the way of Democrats as they have tried to repair the damage done to the economy under Republican leadership;

RESPONSIBLE for giving aid and comfort to this year’s crop of radical Republicans, some of whom have made pledges of their own to get rid of Social Security and Medicare and the Department of Education, among other things;

I urge everyone to read at least the preamble to the Pledge to America, full of half-truths, quarter-truths, and lies, while keeping in mind the above list of gifts Republicans have recently given to the American people.

The Last Word (Maybe) On Roy Blunt And The Joplin Airport


At the groundbreaking for the new $15 million Joplin airport terminal in 2006—90% of the funding supplied by federal deficit spending—Roy Blunt said, as reported by the Joplin Business Journal,

This is an investment in Joplin and surrounding communities towards economic development and job growth.

Unfortunately, these days Blunt no longer believes in such “investments,”  having called the Recovery Act an “absolute outrage” and said,

When you create a public sector job, its only going to be there as long as taxpayers are willing to fund it.

Well, since the Joplin Airport’s ability to contribute to our area’s “economic development and job growth” requires an annual subsidy of almost $3 million from the federal government, let’s hope the taxpayers are willing to fund it until the development and growth happens.

Funny thing, when Obama and the Democrats spend federal money to promote “economic development and job growth,” Blunt calls such spending an “absolute outrage,” but when Blunt had a major and essential hand in securing federal dollars for the same thing here locally, he called it an “investment.”

Well, given the state of our economy, and the need for more such investment, it’s really not so funny is it?

Globe Editorial Takes Your Breath Away

Once again, today’s editorial in the Joplin Globe argued for budget austerity:

Learned economists and not-so-learned pundits will provide all the possible explanations or, if you will, excuses, as to why we are still in a sluggish economy.

Is it possible, we ask, if there is any quick fix for what might be a fundamental restructuring of our entire economy?

Given the alarming rate at which our country is increasing its debt, we call on the administration to reconsider efforts to correct the economy through deficit spending.

Oh, my. Such austerity would likely kill any chance of getting the economy up to speed sometime soon. 

But besides that, it is hypocritical of the Globe to argue for cutting back deficit spending to stimulate the economy, when word is published in the same issue that the Joplin “Regional” Airport had secured a new carrier, American Eagle, to provide air service to local residents.

It’s hypocritical because American Eagle will receive a federal government subsidy of nearly $3 million—annually—and the Joplin Globe has been a supporter of this kind of deficit spending.

According to the story, our mayor, Mike Woolston, said that providing airline service helps attract new businesses and industry to our area:

“This is a huge step forward” for Joplin’s economic develop­ment, Woolston said.

He said companies that scout new locations for business look for ways to rule out cities, and the type of airline service that is available is one of those fac­tors.

Fine.  Maybe having an airport will stimulate our local economy in ways that make the subsidy worth it.  And it certainly is commendable that our local paper supports government deficit spending in ways that are presumably designed to stimulate our local economy. 

But what about the larger economy?  Why is it okay to spend nearly $3 million borrowed bucks on Joplin’s tiny travelling public—admittedly mostly for business travelers—and not okay to borrow money to stimulate other folks’ local economies, and thus cause our overall economy to rebound?

Arguing against short-term deficit spending to improve our larger economic fortunes and supporting long-term deficit spending to improve our local economic fortunes is breathtaking hypocrisy.

This is the same kind of hypocrisy that features phony small-government, anti-stimulus politicians—like Roy Blunt*—bad-mouthing Democratic attempts at boosting the economy one day, and attending ribbon-cutting ceremonies for some Recovery Act project the next.

As I say, it’s breathtaking.


* From The Hill in February of this year:

The Kansas City Star published an Associated Press report that Rep. Roy Blunt (R-Mo.), a candidate for Senate, attended a groundbreaking ceremony for a visitors’ center at a fish hatchery that received $1 million in stimulus funds.

And regarding the Joplin airport itself, here is the opening paragraph from an article published in 2003:

United States Representative Roy Blunt has announced federal funding to assist in seeking new commercial services for the Joplin Regional Airport. This $500,000 grant was provided for the City of Joplin to pursue new opportunities for the Joplin Airport to better serve the Joplin metropolitan area with quality air service.

Of course, back in 2003, when Blunt was proud of using federal dollars in such a way, George Bush was president, not Barack Obama.

Here is a Blunt quote upon completion of the new $15 million terminal at the Joplin airport in 2008, 90% of which was paid for with borrowed federal dollars:

“One of the truly challenging jobs today is to run an airport in a community this size,” Blunt said. “Being able to fly into a community can be the difference if you have jobs or not.”

And here is just a 2008 sample from Blunt’s website, where he frequently boasts about getting some dough–some deficit-increasing dough–for folks back home:

Southwest Missouri Congressman Roy Blunt today announced area priorities he secured federal funding for in the Defense Department’s Appropriations bill for the 2009 fiscal year…

$5.4 million for Missouri State University and St. Johns Health System to improve mobile eye trauma centers for soldiers who sustain severe eye injuries in the field.

$6 million for Missouri State University and Crosslink to develop equipment that delivers medicine directly to the wound, decreasing the required drug dosage for amputee and burn victims wounded in combat.

$7.2 million for Missouri State University and Nantero, Inc., to test and enhance nano-electronic technology that will assist in maintaining space-based ballistic defense applications used within the Department of Defense.

$2.4 million to EaglePicher Technologies to enhance the lifespan and reliability of specialized batteries used by the Armed Forces in weapon and safety systems.

$4 million for Gestalt/Accenture to improve communication systems used by troops on the front line by unifying radios and creating a more secure bandwidth for information distribution.

$5 million for Missouri State University and Foster Miller, Inc., to create a high-tech surveillance system for military instillations and robotic equipment to reduce the risk of injury for military advance teams in combat areas.

Dear Tea Partiers: Here’s How Much Debt George W. Bush And Roy Blunt Foisted On Your Children And Grandchildren

Since some Tea Party folks just refuse to get it, and since conservatives don’t want to hear that the candidates they supported are largely responsible for the economic morass we are currently trudging through, here again is an interesting graph, found on the  Center on Budget and Policy Priorities website. 

It shows what the “legacy costs” of the Bush policies are projected to be, costs that the Obama administration has to account for as it tries to rescue the economy.  These Bush policy legacy costs have now magically become Obama’s “out-of-control spending,” according to the apostles of animosity on the right.

Although the infamous Bush tax cuts for the wealthy and the two deficit-financed wars are counted as part of the legacy costs in the graph below, of significant note is the fact that the cost of Bush’s Medicare Part D prescription drug program is not counted. The authors point out that the “the new program has also added significantly to deficits through 2019, but data limitations leave us unable to quantify its net budgetary effects.”

So, the truth is that the following graph, which attempts to quantify the painful and enduring costs of electing George Bush president in 2000—as well as keeping in office people like Roy Blunt, who enabled him—actually underestimates the damage:

Another Episode Of “Political Philosophy Matters”

If you’re tired of me writing about Republican blame for our economic troubles, which troubles resulted largely from that party’s political philosophy, then move on.  Because here comes some more.  

In an election year especially, it’s important that people don’t forget that elections have consequences.

I found this neat little chart on Whatever Works.  It is just another way of demonstrating the downfalls of Republican governance, at least beginning with Ronald Reagan.

The chart lists each president since WWII and expresses the national debt as a percentage of our Gross Domestic Product.  In other words, it compares the size of our debt load to the size of our economy and how it changed over time.

Among many interesting comparisons one can easily see from the chart, here are just a couple:

Under every Democratic president since WWII, the % of debt to GDP went down.

Democrat Jimmy Carter handed to Republican Ronald Reagan the lowest percentage of debt to GDP since before WWII (32.5%).

When Republican Reagan was finished it was 53.1%.

When Republican Bush I was finished, it was 66.1%, the highest since Eisenhower in 1957.

Under Democrat Bill Clinton the % of debt to GDP actually went down to 56.4.

Under Republican Bush II, it went from 56.4 to 83.4, the highest since the 40s.

Democrat Barack Obama inherited the highest % of debt to GDP since 1949.

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