The Bush Deficit Bamboozle

http://krugman.blogs.nytimes.com/2010/07/19/the-bush-deficit-bamboozle/?src=twt&twt=NytimesKrugman

July 19, 2010, 1:45 pm

The Bush Deficit Bamboozle

OK, even by contemporary standards, this is rich: the official Republican stance is now apparently that Bush left behind a budget that was in pretty good shape. Mitch McConnell:

The last year of the Bush administration, the deficit as a percentage of gross domestic product was 3.2 percent, well within the range of what most economists think is manageable. A year and a half later, it’s almost 10 percent.

They really do think that we’re idiots.

So, that 3.2 percent number comes from here (pdf). Where’s the bamboozle? Let me count the ways.

First, they’re hoping that you won’t know that standard budget data is presented for fiscal years, which start on October 1 of the previous calendar year. So this isn’t the “last year of the Bush administration” — they’ve conveniently lopped off everything that happened post-Lehman — TARP and all.

Second, they’re hoping you won’t look at what was happening quarter by quarter. Here’s net federal borrowing as a percentage of GDP, quarter by quarter, since 2007: [see below]


Can we agree that the deficit in the first quarter of 2009 — Obama didn’t even take office until Jan. 20, the ARRA wasn’t even passed until Feb. 17, and essentially no stimulus funds had been spent — had nothing to do with Obama’s polices, and was entirely a Bush legacy? Yet the deficit had already surged to almost 9 percent of GDP. Even in 2009 II, Obama’s policies had barely begun to take effect, and the deficit was already over 10 percent of GDP.

What this chart really tells us is what you should have known already: the deficit is overwhelmingly the result of the economic slump, not Obama policies. But the usual suspects want to fool you.

I’d like to think that the raw dishonesty of this latest Bush defense would be obvious to everyone. But after the past decade, I’ve stopped believing such things. They think we’re idiots — and they may be right.

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