Wednesday, September 26, 2012
Obama gets busted for deficit lies
By: John Hayward
9/26/2012 10:42 AM
Glenn Kessler of the Washington Post dropped a four-Pinocchio fact check on Barack Obama’s claim, during a recent “60 Minutes” interview, that “90 percent” of the federal deficit is due to George Bush’s policies, while only 10 percent of it comes from Obama policies.
Kessler’s fisking is very thorough, including a discussion of how difficult it can be to nail down the precise meanings of politically malleable terms like “tax increase” and “tax rate.” ObamaCare’s gigantic middle-class tax increase is going to feel very, very real when it digs into six million wallets, but there’s still an ongoing debate about its magical protean nature as a “tax penalty” – a quantum state in which it alternately is, or is not, a tax increase, depending on who observes it.
It is also worth noting Obama was responding to a statement by Steve Kroft of “60 Minutes” about the national debt – specifically, “The national debt has gone up sixty percent in the four years that you’ve been in office.” The current state of the annual deficit is not the same thing. Just for the sake of argument, suppose the deficit was only projected to be $900 billion next year. That would still be appalling, and the national debt would greatly increase, but Obama would have been able to claim he had “reduced the deficit.” Such budget games are a sad staple of Washington rhetoric.
And, to bring back another standard Washington game that Kessler doesn’t dig into, “deficit reduction” is not at all synonymous with “reduced government spending.” Tax reductions are routinely blamed for increasing the deficit, while vastly greater increases in spending are downplayed or ignored. Static analysis of tax reductions generally assumes that every 1 percent cut means 1 percent less revenue to the Treasury, which is not remotely true at any income level – increased economic activity and reduced tax avoidance always offsets some of the loss, and it can even lead to increased receipts to the government at lower effective tax rates.
We could eliminate Obama’s deficits with a trillion-dollar tax increase, but that most certainly would not be a levy exclusively laid against “millionaires,” and it would annihilate the U.S. economy. And because every adjustment to tax and spending levels is executed through massive bills containing hundreds of different policies, it makes precise analysis of the effect of any specific policy very difficult, and highly subject to political spin – even before introducing external factors beyond the current government’s direct control. I’ve always taken that as a strong argument on principle against Big Government myself, but your mileage may vary.
At any rate, Kessler crunches the numbers for the annual deficits under Obama, and finds that about half of the total comes from “economic and technical difficulties,” by which he generally means the economic slowdown, and the Congressional Budget Office’s failure to predict its effects. (Fold that into my argument on principle against Big Government economic planning.) Of the remainder, Kessler judges that Bush and Obama share roughly equal blame in 2009, the “hybrid” year in which the policies of the previous Administration naturally had the greatest influence. After that, Bush policies are “responsible” for 14 percent in 2010 and 10 percent in 2011, while Obama gets 35 and 44 percent of the blame, respectively.
In other words, as anyone smart enough not to fall for Obama campaign rhetoric already knew, the influence of the previous president fades over time, and is rarely anywhere near as powerful as policies enacted by the Administration currently in power. Obama himself is likely to become one of the most dramatic exceptions to that rule, because the ObamaCare fraud was sold with phony accounting tricks that made it look relatively revenue-neutral in its first ten years, by front-loading income and deferring costs. “All bets are off after that,” Kessler observes.
Funny, when we conservatives were yelling that from the rooftops in 2009, we were dismissed as “extremists.”
These claims are not made from innocent naivete on Obama’s part (and even if they were, it would surely disqualify him from holding office.) He knows he’s lying. He has access to all of the information cited in these “fact check” articles, plus a team of highly paid advisers to digest it for him. Kessler also notes that Obama continually cites numbers about a mythical slowdown in government spending from a widely-debunked MarketWatch column. It shouldn’t just be a few dedicated fact-checkers ripping into Obama’s claims. A reputable press corps would be savaging him for blatantly lying to the nation about this important matter. But while they’ll micro-analyze everything Mitt Romney says for gaffe particles, the media didn’t even care when Obama absurdly claimed not to know the amount of the national debt on Dave Letterman’s show.
“We are not trying to make excuses for the fiscal excesses of the Bush administration – and Congress – in the last decade,” Kessler concludes. “But at some point, a president has to take ownership of his own actions.” I might have to drop a couple of Pinocchios on that assertion, depending on how the 2012 election plays out.
To read another article by John Hayward, click here.
Posted by Brett at 4:47 PM