Obama's Expedient Debt Logic

[Meadmaker]

[qimg]http://andrewsullivan.theatlantic.com/.a/6a00d83451c45669e20120a5dc5c99970c-800wi[/qimg]

http://andrewsullivan.theatlantic.com/the_daily_dish/2009/09/movement-conservatism-and-debt.html


*For nitpickers: as in the article we're making the assumption that the President spends this money. The president does often set the agenda for Congress, and in the case of Iraq, it was most certainly Bush's war.

There must be some mistake. It seems that someone scribbled a vertical line there on the end.


For what it's worth, I'm actually a deficit hawk, and no fan of Obama's first six months in office due to lack of action on the debt. I would just like to hear him say something like, "Due to the near collapse of the economy, we've had to put off our promised revenue enhancements, but we will have to look at them as soon as we can do so as soon as we are back from the brink of the depression." However, to Republicans who have been born again into fiscal responsibility all of a sudden, there is but one response:

 

[mhaze]

It's interesting that you state this is the result of "30 years of bad fiscal policy" when in the very same graph you continually reference the fiscal years 2000-2001 very clearly show a surplus

So we were on the right track around about 2001 or so, and then what happened?

Umm, no....

One issue was Clinton's folding the SS Trust Fund into the general budget.

Others BAC has mentioned.

 

[Cain]

So by their metrics Bush also spent more on welfare in a year than the entire cost of the Iraq war.

Which confirms what everyone should have strongly suspected, and, predictably, undercuts most of BAC's original criticism.

Now, in terms of hypocrite-speak, let's clarify the argument.

Democrats claim Republicans are hypocrites because the GOP talks about reducing the debt and then runs up deficits. As Dick Cheney said: "Reagan proved deficits don't matter."

BAC charges Democrats are hypocrites because they hammered Bush on deficits and now Obama's going to preside over deficits. He's getting a pass from his side.

This is frustrating to explain because BAC's full of more **** than usual. Critics of Bush's tax plan warned well in advance that it would lead to deficits. Republican defenders of Bush (now believed to be a socialist) did their usual reality-challenged song and dance about how tax cuts would generate even greater revenues (you know, like what happened with Reagan ). And then we had Bush deficits, as predicted.

As for Obama, we know he inherited an economy in shambles. It doesn't matter who became president, we'd be running sizable deficits now. That doesn't excuse bailout giveaways, unless people want to argue they were part of a larger "stimulus" that was vitally important to saving the economy from depression. All policies have trade-offs, and Obama's economic advisers understood that move would deepen the deficit. It doesn't mean Obama's a hypocrite on the deficit because he faced what we hope is a one-time event.

Now, Bush also had an excuse: he claimed (mistakenly) that he had warned against a trifecta of circumstances that would entail deficits. So maybe people give Bush a pass for the first round of tax cuts (even though, again, everyone knew what they would do). Then in 2003 he passed another round of tax cuts and started up the hopelessly stupid war (one liberals warned against).

As ****ed up as the Democrats are there are reasons -- good reasons -- why most people trust Republicans even less. You see, for them, the last eight years happened.

Mark Kleiman said something true on Bloggingheads regarding the GOP's enthusiasm for spending billions on prisons, three strike laws, all that crap: "For conservatives government spending is only wasteful when you're trying to help people."
--------
Re: What mhaze's chart demonstrates:

I've said this problem is the culmination of 30 years of bad fiscal policy. What I infer from the chart is interest on the debt reaching a level within a decade or so equal to government receipts from all personal income tax. From that I conclude the rhetoric to be specious.

If you want to say the first glimmer of truly insane fiscal policy in the 80s, starting with Reagan (and the consent of a Democratically controlled legislature), then I agree. Under the Clinton term we had far more fiscal discipline; interestingly BAC's all too ready to give credit to Gingrich and pure luck instead of mentioning the ginormous elephant in the room: in 1993 Clinton's tax increase on the highest marginal brackets barely made it through Congress. Republicans at the time predicted depression and worse, since this was after all "the largest tax hike in history blah blah ****in' blah." The fiscal nonsense comes from Republicans enamored with supply-side economics, and these same people(?) would have us believe they're "fiscally conservative."

 

[daenku32]

http://www.cnsnews.com/public/content/article.aspx?RsrcID=54400



Now contrast that fact with this speech by Obama back in March 2008 while running for President:

http://www.cfr.org/publication/15782



Now a question for Obama supporters. Why is that same logic no longer true?

Current deficits are Keynesian.

Can you attempt to give an explanation for deficits during Bush years, when the economy was expanding well beyond the 2001 recession dip? Keynesian economics won't help you. Neither will any other one that I'm aware of.

 

[Meadmaker]

As ****ed up as the Democrats are there are reasons -- good reasons -- why most people trust Republicans even less. You see, for them, the last eight years happened.

 

[Dancing David]

Guess you missed the fact that over $10 TRILLION dollars was spent on War On Poverty related programs over the last 40 years or so. But then perhaps you subscribe to the Michelle Obama view of America ... that there was nothing to be proud of about this country until Barack became the big cheese.

I guess you missed the fact that the war on poverty has changed, you ignore the facts of 'welfare reform', who received Medicaid BAC? How many children, how many elderly in nursing homes, how many disabled people?

I am sure that whatever figure you want to name for the 'war on poverty', which you haven't cited any sources for, will pale in comparison to just one thing, corporate tax breaks.

 

[mhaze]

..... Re: What mhaze's chart demonstrates:

Really irrelevant, trying to place blame on one party or the other. At this point. Also irrelevant as to causation -Look at peoples' spending and savings, consumption patterns over that 30 years as affected by fed policy.

 

[MattusMaximus]

Umm, no....

One issue was Clinton's folding the SS Trust Fund into the general budget.

Others BAC has mentioned.

Yeah, so those bars on the left hand side of your own graph which are above the zero line - aren't actually a surplus... sure

 

[Hindmost]

http://www.ssa.gov/history/BudgetTreatment.html

 

[BeAChooser]

I simply believe that once we have elected a President, that is the administration under which we must set ourselves to work.

Which means what? That we have to do what democrats want regardless of what history shows? Sorry, but at this time our proper job is to make sure this President accomplishes as little of his agenda as possible. Otherwise, we will be saddled with programs just as expensive and just as ineffective as the War On Poverty, War on Drugs, Public Education, Medicare and Medicaid. Programs that will probably bankrupt the country for sure.

I will compliment Clinton, because he did do very well in certain areas.

No, what Clinton did was try to push some of the same type of nonsense that Obama is now pushing ... but he failed. Then being the consummate politician (as opposed to the ideologue that Obama appears to be) he did what conservatives led by Gingrich wanted. And THAT is why the economy did so well for most years during his term. What Clinton did was get the benefit of an internet boom and the collapse of the Soviet Union ... something that Bush did not have the luxury of enjoying. And what Clinton did was ignore a problem that turned into 9/11 ... just like Obama is (in my opinion) sowing the seeds for something far worse than 9/11. Bush had to deal with the collapse of the internet boom and a new global war that was not of his making.

I won't compliment Bush much, because really, he didn't do much on the domestic front except continue to encourage people to spend money they didn't have...as became obvious toward the end of his last term, no?

My view is slightly different. I think Bush's biggest mistake was trying to appease democrats by going along with much of their agenda ... which involved spending money we didn't have. Which involved adding more money to failed programs (like Public Education). And not fighting hard enough when democrats ignored the warning signs of the morass that was to become the Mortgage Crisis, Banking Failure and 2008-2009 recession. But I will compliment Bush on his handling of the WOT ... a problem that it's quickly becoming evident Obama is woefully prepared to handle.

War on Poverty, trillions and trillions of dollars. Forty years, you say. Okay...so...isn't it kind of obvious by now that whatever they're spending all that money on, something isn't going right?

Well apparently not to some people. Because they want to throw trillions more down the same hole dug assuming the same set of assumptions.

Of COURSE I haven't missed all that money being spent. I, right along with you, have watched it go to programs and state governments that do nothing but mismanage the funds and pay the government people who oversee it far too well for the pathetic jobs they do.

And yet you seem to be advocating letting the Federal Government throw more trillions down that hole. Color me puzzled.

Frankly, I don't know what Michelle Obama's view of America is.

Well let's just say that during the campaign she said, while stumping for her husband, that nothing America did during her life, until Obama was chosen to run for President, gave her any pride in America. Or words to that effect. I apologize for suggesting that's your view too.

As for the inconsistencies you speak of...I think you had another thread about those as well, no?

Not these specific ones. I've pointed out lots of flaws and dishonesty in Obama's claims on various subjects, but as far as I know this is the first time I've questioned this specific inconsistency.

I think...people screw up, say things wrong, get confused, and, when it comes to politicians? I admit it: I don't think they always understand what someone else probably wrote down for them to say.

Well for such a supposedly smart guy (remember, Bush is also claimed to be the dumb one), Obama sure has flubbed a lot. Either he's not as bright as his many supporters claimed during the campaign or he's dishonest.

Then again, I don't know a single person, anywhere, that could keep that much information straight 24 hours a day/7 days a week, while constantly being bombarded by more and more information about thousands of different things.

Oh come on. We aren't talking minor details here. This is the big picture. You mean to say Obama can't even keep the big picture clear in his mind? If that's true, he really shouldn't have his finger on the nuclear button or be spending our trillions. Or maybe it's not true, in which case a fundamental dishonesty is in evidence.

I think there are unrealistic expectations placed on them, as individuals.

It's not unrealistic to expect a man claimed by his supporters to be one of the smartest Presidents ever, to keep a few top level facts and some top level logic straight. When he claimed (to bolster his health care proposals) that his efforts were going to shave $2.2 trillion dollars off the national debt over 10 years from what it would have been had Bush's policies remained in place, he was either being dishonest or he fundamentally didn't understand what the CBO had reported. Or his staff deliberately misled him or they also were unable to understand the simplest of statements in the CBO's March report. When he on one hand says that debt is bad and Bush's war in Iraq was bad because of the extra debt it created, it's not unreasonable to expect him to still see debt as bad when his social agenda is going to increase the national debt by over 3 times as much as the War in Iraq. This is top level stuff, sugarb.

 

[Dr Adequate]

Which means what? That we have to do what democrats want regardless of what history shows? Sorry, but at this time our proper job is to make sure this President accomplishes as little of his agenda as possible. Otherwise, we will be saddled with programs just as expensive and just as ineffective as the War On Poverty, War on Drugs, Public Education, Medicare and Medicaid. Programs that will probably bankrupt the country for sure.



No, what Clinton did was try to push some of the same type of nonsense that Obama is now pushing ... but he failed. Then being the consummate politician (as opposed to the ideologue that Obama appears to be) he did what conservatives led by Gingrich wanted. And THAT is why the economy did so well for most years during his term. What Clinton did was get the benefit of an internet boom and the collapse of the Soviet Union ... something that Bush did not have the luxury of enjoying. And what Clinton did was ignore a problem that turned into 9/11 ... just like Obama is (in my opinion) sowing the seeds for something far worse than 9/11. Bush had to deal with the collapse of the internet boom and a new global war that was not of his making.



My view is slightly different. I think Bush's biggest mistake was trying to appease democrats by going along with much of their agenda ... which involved spending money we didn't have. Which involved adding more money to failed programs (like Public Education). And not fighting hard enough when democrats ignored the warning signs of the morass that was to become the Mortgage Crisis, Banking Failure and 2008-2009 recession. But I will compliment Bush on his handling of the WOT ... a problem that it's quickly becoming evident Obama is woefully prepared to handle.



Well apparently not to some people. Because they want to throw trillions more down the same hole dug assuming the same set of assumptions.



And yet you seem to be advocating letting the Federal Government throw more trillions down that hole. Color me puzzled.



Well let's just say that during the campaign she said, while stumping for her husband, that nothing America did during her life, until Obama was chosen to run for President, gave her any pride in America. Or words to that effect. I apologize for suggesting that's your view too.



Not these specific ones. I've pointed out lots of flaws and dishonesty in Obama's claims on various subjects, but as far as I know this is the first time I've questioned this specific inconsistency.



Well for such a supposedly smart guy (remember, Bush is also claimed to be the dumb one), Obama sure has flubbed a lot. Either he's not as bright as his many supporters claimed during the campaign or he's dishonest.



Oh come on. We aren't talking minor details here. This is the big picture. You mean to say Obama can't even keep the big picture clear in his mind? If that's true, he really shouldn't have his finger on the nuclear button or be spending our trillions. Or maybe it's not true, in which case a fundamental dishonesty is in evidence.



It's not unrealistic to expect a man claimed by his supporters to be one of the smartest Presidents ever, to keep a few top level facts and some top level logic straight. When he claimed (to bolster his health care proposals) that his efforts were going to shave $2.2 trillion dollars off the national debt over 10 years from what it would have been had Bush's policies remained in place, he was either being dishonest or he fundamentally didn't understand what the CBO had reported. Or his staff deliberately misled him or they also were unable to understand the simplest of statements in the CBO's March report. When he on one hand says that debt is bad and Bush's war in Iraq was bad because of the extra debt it created, it's not unreasonable to expect him to still see debt as bad when his social agenda is going to increase the national debt by over 3 times as much as the War in Iraq. This is top level stuff, sugarb.

You seem to be recycling your old nonsense. It's like BAC's Greatest Hits. Or rather, Lamest Misses. Enjoy twenty of the greatest classic fails. With the number one whine "I Will Always Hate You (Bill Clinton)" and that timeless classic "I Made Up Some Stuff About The War On Poverty". Not available in the shops, because no-one's buying it.

Couldn't you come up with some new nonsense, you know, something that, while equally dumb, hasn't been debunked yet? Only it's hard to go on laughing at the same old jokes.

 

[BeAChooser]

The first time I read this sentence it seemed to imply that Bush spent less on welfare than on Iraq but that's not the case.

Whether the article implies that or not is totally irrelevant to the OP question. The issue (the stated OP question) is why Obama apparently thinks that far greater spending on welfare (than on the entire Iraq war), which I believe will also undermine our economy, balloon our national debt and place an unfair burden on our children and grandchildren, isn't also a problem. I never claimed that Bush spent less on Welfare than on the War in Iraq. Nor do I believe that Bush claimed that one type of spending was bad but the other was good. So let's get back to the real topic. The apparent inconsistency in Obama's logic.

Of course they ignore the benefits and effects of each kind of spending. Since they define "welfare" as any means-tested program given to low income people, they include all sorts of programs that help stimulate the economy by helping people stay in the workforce. Job training programs, subsidized health care, housing subsidies, etc. all help keep the working poor at work and off the streets.

Perhaps there is some benefit, but can you quantify it in any way? I just know that after spending 10 trillion dollars over the last 40-45 years on welfare programs (that could have been allocated directly to economic growth instead), the number of poor people in the US is just as large as it was 45 years ago. Indeed, prior to the enactment of Johnson's War On Poverty programs, and all those that followed them, the poverty rate was dropping dramatically. However, within years of the beginning of those programs, the poverty rate leveled off at a double digit value and saw no further decrease. In fact, in recent years the unemployment rate has been steadily climbing. I and a great many people believe that what the War On Poverty actually accomplished was to build in a minimum rate of poverty by encouraging dependency on the government by a whole class of people. Beggars rather than Choosers. And Obama is now only trying to increase that dependency. Because they'll all be democrats.

What is the benefit in giving billions to private contractors to rebuild Iraq's infrastructure?

What long term benefit was there to spending billions to help Japan and Germany recover? What benefit is there to creating a stable, prosperous arab democracy in the middle east ... one that can serve as an example to other arab countries in that region? A democracy that is sitting on the largest oil reserves in the world and will likely be a major trading partner? What benefit is there to creating a democracy that is willing to help us fight terrorism in the region and keep terrorists from using that country and it's oil as a resource? What benefit is there to Saddam and his son's being dead (just think of all the lost opportunities for expensive mischief in the world over the next several decades)? I'm puzzled that you can see no benefit to Bush's invasion of Iraq. It's almost like you shut your eyes.

 

[BeAChooser]

Might I suggest, though, that there are a few things you are leaving out of the equation in terms of why "welfare" spending will cost more than the entire war?

You've simply missed my point. I suggest you read my last post to psychictv. The issue is why war debt is bad but welfare debt is good. The CBO projected an increase in national debt over the next 10 years, due to changes that Obama made, of nearly twice the total long term projected cost of the Iraq War (by anti-war liberals). Why isn't that increase in debt bad?

Now, no, I don't know the best answer for this...but what I do know is that we cannot sustain these levels of unemployment.

But how do you know that Obama's policies didn't make things worse ... as many economists suggested beforehand they would? In selling the stimulus, his own people projected a maximum unemployment rate of 9% IF WE DID NOTHING. He promised that his trillion dollar stimulus program would prevent unemployment from exceeding 8%. Yet here we are today with unemployment of over 9.5% (on average nationally). What went wrong? How do we know that had we done nothing his economists wouldn't have been right? Maybe we'd have only seen a max of 9% and the economy would already be well on it's way to recovery (because industry wouldn't have delayed actions needed to recover, hoping to get a good deal from the government's largess)? What you folks don't seem to understand is that recessions serve a purpose. They help economies eliminate inefficiencies and waste. But government interference is preventing that. Government is building inefficiencies into our economy in much the same way government has built inefficiencies into it's own operations and in the trillion dollar programs it controls. And those inefficiencies will make us all poorer that we would have been if government had just kept it's hands off OUR MONEY and let the capitalist and free market mechanisms work.

 

[BeAChooser]

Under the Clinton term we had far more fiscal discipline; interestingly BAC's all too ready to give credit to Gingrich and pure luck instead of mentioning the ginormous elephant in the room: in 1993 Clinton's tax increase on the highest marginal brackets barely made it through Congress. Republicans at the time predicted depression and worse, since this was after all "the largest tax hike in history blah blah ****in' blah."

Let's look at the real story rather than your revisionism. I suggest everyone read this article (I've merely quoted the introduction and conclusions):

http://www.heritage.org/research/taxes/wm1835.cfm

March 4, 2008

Tax Cuts, Not the Clinton Tax Hike, Produced the 1990s Boom

When pressed about the harmful effects on the economy, proponents of higher taxes often fall back on what can be called the "Clinton defense." President Bill Clinton pushed a major tax increase through Congress in 1993, and, so the story goes, the economy boomed. How, then, can tax increases be so bad for the economy? The inference is even stronger: that higher taxes actually strengthened the economy.

The Clinton defense is superficially plausible, but it fails under closer scrutiny. Economic growth was solid but hardly spectacular in the years immediately following the 1993 tax increase. The real economic boom occurred in the latter half of the decade, after the 1997 tax cut. Low taxes are still a key to a strong economy.

... snip ...

Conclusion

Proponents of tax increases often reference the Clinton 1993 tax increase and the subsequent period of economic growth as evidence that deficit reduction through tax hikes is a pro-growth policy. What these proponents ignore, however, is that the tax increases occurred at a time when the economy was recovering from recession and strong growth was to be expected. They also ignore that the real acceleration in the economy began in 1997, when economic growth should have cooled. This acceleration in growth coincided with a powerful pro-growth tax cut.

The evidence is persuasive that the tax increase probably slowed the economy compared to the growth it would have achieved and that the subsequent tax cuts of 1997, not the tax increases, were the source of the acceleration in real growth in the latter half of the decade. As taxes are now above their historical average as a share of the economy, and are rising, Congress should look to enact additional tax relief to keep the economy strong.

 

[BeAChooser]

Current deficits are Keynesian.

Are the trillion dollar projected deficits 10 years from now under Obama's budget Keynesian as well?

 

[Azure]

Welfare is a mandatory spending program Obama inherited from the Bush administration. To cut it requires an act of Congress, yet for 12 years the Republican congress failed to do so. Somehow though, after 9 months in office it’s Obama’s fault even though the president has no actual say in Welfare spending. Interesting logic to say the least.

While true, about the Republicans not cutting enough either, the President can veto every bill and force Congress to make cuts.

Obama, like Bush isn't going to do that.

 

[BeAChooser]

I am sure that whatever figure you want to name for the 'war on poverty', which you haven't cited any sources for, will pale in comparison to just one thing, corporate tax breaks.

Again David, if you are going to act like I've posted no sources on this forum to support my assertions about the failure of the War on Poverty, there really is no point in debating you. As often as you intrude on my threads, you MUST be aware of those discussion and therefore are only trying to act ignorant of them in order to score cheap points. My posting them for you yet again would be a waste of my time. If you really are interested, learn to use your JREF browser ... or perhaps you should take Aricept to improve your memory.

 

[BeAChooser]

With the number one whine "I Will Always Hate You (Bill Clinton)" and that timeless classic "I Made Up Some Stuff About The War On Poverty".

DA, I know you will always "love and admire" Clinton regardless of what facts are brought to the table to show he was a duplicitous, treasonous, lying scoundrel. And I've made up nothing regarding the War on Poverty. If you think you can prove I have, do so, otherwise we will all conclude you are now lying. Or you have your head stuck deep in the ground to avoid learning anything but what the liberal media and your democrat friends tell you.

 

[psychictv]

The issue (the stated OP question) is why Obama apparently thinks that far greater spending on welfare (than on the entire Iraq war)...isn't also a problem.

Because spending money for social programs in the U.S. helps our economy and helps the citizens of the U.S. Spending money on an unnecessary war in Iraq does not.

Perhaps there is some benefit, but can you quantify it in any way?

Sure I can. Would you name a specific program though? I'm not sure that I have the space or time here to explain to you how our entire society functions.

I just know that after spending 10 trillion dollars over the last 40-45 years on welfare programs (that could have been allocated directly to economic growth instead), the number of poor people in the US is just as large as it was 45 years ago.

You have some evidence of that? Looking at this chart it appears that the poverty rate declined or stayed steady from 1965 to about 1980 except for a couple small upticks during recessions. By the end of the Reagan and Bush administrations it was almost up to where it was in 1965 and then it started to fall again around 1993 and rise again in 2000. Coincidence?
http://en.wikipedia.org/wiki/File:Poverty_59_to_05.png

Indeed, prior to the enactment of Johnson's War On Poverty programs, and all those that followed them, the unemployment rate was dropping dramatically.

And it continued to do so until the recession of 1970 and the election of Nixon.
http://en.wikipedia.org/wiki/File:Us_unemployment_rates_1950_2005.png

However, within years of the beginning of those programs, the unemployment rate leveled off at a double digit value and saw no further decrease. In fact, in recent years the unemployment rate has been steadily climbing.

Hmm. That's not what the above graph shows. I see a nice steady drop during the Clinton years that mirrors that of the Kennedy/Johnson years.

What benefit is there to creating a stable, prosperous arab democracy in the middle east ... What benefit is there to creating a democracy that is willing to help us fight terrorism in the region and keep terrorists from using that country and it's oil as a resource?

To turn your own question back on you "Perhaps there is some benefit, but can you quantify it in any way?" What evidence is there that a stable prosperous Arab democracy has been created in the middle east?

 

[BeAChooser]

Originally Posted by lomiller
Welfare is a mandatory spending program Obama inherited from the Bush administration. To cut it requires an act of Congress, yet for 12 years the Republican congress failed to do so. Somehow though, after 9 months in office it’s Obama’s fault even though the president has no actual say in Welfare spending. Interesting logic to say the least.

While true, about the Republicans not cutting enough either, the President can veto every bill and force Congress to make cuts.

Obama, like Bush isn't going to do that.

Both of you miss the point. As the CBO reports, new Obama spending programs will increase the national debt more than $6 trillion dollars over what it would have been had existing law, when Obama entered office, just remained in effect. Obama's efforts will DOUBLE the national debt over what it was when Bush left office. He didn't inherit that. Somehow, debt under Bush was bad but equal debt under Obama is good. I'm just puzzled by the inconsistency in this logic. A topic many here seem to want to avoid.