I haven’t posted a blog entry for a couple of days. I’ve written a number of them in my head, and I keep (as usual) accumulating news stories I want to copy or link to. But I think one thing that has held be back somewhat is an urge to become more political and election oriented in the things I read and write about. I’ve tried to keep personal politics out of this as much as possible, but in posting economic-related items it should be clear to most where my political views lie. But now, at the risk of losing some of my (too few) readers, I just can’t keep from letting more politics creep into the things I post on this blog. I’m still on the lookout for fun and weird stories. I still have tho occasional family story to tell. I still have some stories from our vacation (and pictures) to share. But I suspect there will be a number of things I write and post over the next few weeks that relate to the upcoming Presidential election. Feel free to skip them if they don’t interest you or if you disagree and I make you angry. I really do value the fact that you take the time to read these.
So on to the U.S. federal budget deficit. A common theme is that the deficit is bad, but the problems are all the fault of George Bush. I found this explanation and graph very informative:
[This chart shows] the federal deficit as a percentage of GDP through the Bush and Obama years. (Source: White House historical tables):
As you can see, the deficit exploded in Fiscal Year 2009. Of course that fiscal year started in October of 2008, and includes the last quarter of Bush’s presidency, when TARP was passed. You could plausibly say the deficit explosion started at the very end of Bush’s presidency, but only with the embrace of bailout/stimulus policies that have been the hallmark of the Obama administration. In any case, Obama came in for the second, third, and fourth quarters of that fiscal year, and piled on stimulus and other supplemental spending bills several times larger than TARP. That’s where most of the “exploding deficit” for 2009 comes from.
The bigger picture is this: If you count FY 2001 as a Bush-era budget (three quarters under Bush) and FY 2009 as an Obama-era budget (three quarters under Obama) then the picture we get is this: The Bush-era budget deficits averaged about 2 percent of GDP, which is the historical average for the federal deficit since the end of World War II. The Obama-era budget deficits, by contrast, have averaged 9 percent of GDP. It’s bad enough that team Obama doesn’t see this is much of a problem at all, much less a crisis that threatens the future of the Republic. But it is really shameful that they would try to tag Paul Ryan, one of the most fiscally responsible conservatives, with “exploding deficits.”