Economics

Krugman on Obama's Deficits: Blame Reagan!

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Paul Krugman puzzles over the surge in public and private deficit-spending and implausibly concludes that, "um, didn't something…happen around 1980? Can't quite remember…someone whose name begins with the letter 'R'?":

The turn to budget deficits was a direct result of the new, Irving-Kristol inspired political strategy of pushing tax cuts without worrying about the "accounting deficiencies of government."

More here.

For the record—and without letting Reagan off the hook for running budget deficits—here's some actual data.

Between 1950 and 1980, the federal government ran budget surpluses five (5) times. Between 1980 and 2009, the federal government ran budget surpluses…four (4) times. Even the Obama White House is not projecting a return to surpluses any time over the next decade. Indeed, separating out the colossal deficit of FY2009 (to which both Bush and Obama contributed mightily), Obama's smallest annual deficit over the next several years will be bigger than Bush's largest.

Krugman blames tax cuts for budget deficts, but total government receipts were $39.4 billion in 1950 and $2,524 billion in 2008 (in nominal terms, not adjusted for population growth or income), suggesting that, I don't know, spending might have something to do with persistent government deficits.