When it Comes to Massive Federal Deficits, Blame Bush. And Blame Obama Even More.

Over at AOL News, John Merline asks who the hell is responsible for the budget deficits that stretch out before us in the 21st century like an infinitely stretch of bad road. Based on Congressional Budget Office projections, his answer:

The CBO now expects revenues to be $2.2 trillion lower over the next eight years than it did under Bush's budget -- despite the fact that Obama's budget raises taxes on the rich. To the extent that Bush's economic policies caused that recession and its long-term revenue effects, he takes the blame for the falloff in federal tax receipts.

But what really stands out when you make this comparison is the fact that Obama's budget dramatically ratchets up long-term spending….

Between 2011 and 2018, Obama would spend $4.9 trillion more than Bush had planned to. Keep in mind that all this extra spending is after the economic stimulus has been almost entirely exhausted.

In other words, if Obama had simply kept Bush's spending policies in place, federal deficits over the next eight years would be 60 percent lower. In 2018, we'd have a deficit of just $188 billion, instead of the projected $996 billion under Obama's budget.

More here.

There are reasons to quibble with CBO estimates (read about them here), but in the main the point is solid and non-controversial: Spending more typically leads to bigger deficits because pols tend to undercount costs and overcount revenue. Here are Obama's own original projections from his first budget, ironically titled "A New Era of Responsibility":

OK, OK, I know what you're saying: Any idiot can get us into this sort mess. George Bush did. Barack Obama did. Who can get us out of this mess?

Get thee to a newsstand now and buy the November issue of Reason, in heart-stopping 3D (comes complete with glasses too, for reading the mag and special Reason.tv vids also in 3D!). Or buy a subscription now for just $20 and get the special ish! The November ish includes over a dozen smart ways to slash government spending before it shreds the economy like Freddy Krueger shredded Johnny Depp back in the day.

Comments

[robc]

There are reasons to quibble with CBO estimates

Let's not quibble about who killed who

[Pro Libertate]

Let's not bicker and argue over who misquoted who.

[robc]

Yeah, tried to google it. If quibble isnt in it, why did that word set me off?

[Pro Libertate]

I don't know.

[Ragin Cajun]

Is this when you get flung into that ravine?

[Pro Libertate]

No.

[robc]

Pro Lib doesnt get that far, he screws up Question 1.

[Pro Libertate]

I daresay I'd do better than you, Quibbler.

[Pro Libertate]

Is there a Batman villain with that name, yet? Because there should be.

[robc]

What would The Quibbler's special powers be?

[SugarFree]

What would The Quibbler's special powers be?

That's indeterminate at this time.

[Pro Libertate]

Well, technically, that's not entirely the case. Not on Mondays, anyway.

[SugarFree]

Due to the shift in the Gregorian calendar, who even knows when Monday really is?

[Pro Libertate]

Clearly, you do not.

[Ragin Cajun]

The Quibbler was probably that Hong Kong accountant guy.

[Pro Libertate]

What would The Quibbler's outfit look like?

[SugarFree]

Who says he or she wears an outfit?

[robc]

I know both my name and quest. And that Ninevah is the capitol of Assyrica. Favorite color? Eh, might blow that one.

[Pro Libertate]

Blue is always nice. And I think we all know how to handle the airspeed velocity of an unladen swallow question.

[SugarFree]

What is "blue" to a colorblind person?

[Pro Libertate]

A slap to the frontal lobe?

[SugarFree]

Which frontal lobe are you referring to?

[Pro Libertate]

If I have to explain, you wouldn't understand.

[SugarFree]

An appeal to obscurity. Wonderful.

[Pro Libertate]

You're right--you wouldn't understand even if you could.

[Pro Libertate]

Oh, by the way, a transcribed version of the script is available on-line.

[modnar]

We're dooooooomed.

[R C Dean]

To the extent that Bush's economic policies caused that recession and its long-term revenue effects,

Can we stop pretending that the President sets economic policy (whatever that is) all by his lonesome, and include Congress in the indictment.

You remember, the Congress that turned back Bush's attempts to rein in Fannie and Freddie, etc. etc.

Sure, Bush's domestic policy agenda was teh crap, but there wasn't much he did that Congress didn't make worse.

[robc]

Bush attempted to reign in F&F? I remember Paul trying it, but not Bush.

Of course, by "reign in", I mean eliminate entirely.

[Brett L]

Rein in. The metaphor is to horses not kings. Tow the lion or you're literally killing the language for all intensive porpoises.

[Brett L]

shit. Not metaphor. Damn you blogosphere laws. Damn you.

[robc]

Just deserts.

[Pro Libertate]

Just deserts. Which deserts are just, and which are unjust? I've only been to a couple.

[robc]

If you escaped, it was an unjust one.

[Pro Libertate]

Now, now.

[John]

WASHINGTON, Sept. 10? The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

http://www.nytimes.com/2003/09.....e-mae.html

[robc]

Same Date (although I think it was also introduced in 2002)

9/10/2003--Introduced.
Free Housing Market Enhancement Act - Prohibits providing Federal funds to the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), or any Federal Home Loan bank (Such entities are referred to as government sponsored enterprises, or GSEs.) Amends the Federal National Mortgage Association Charter Act ( Fannie Mae) and the Federal Home Loan Mortgage Corporation Act (Freddie Mac) to repeal: (1) the State tax exemption; (2) the requirement that the Treasury approve debt issues; (3) Treasury authority to purchase Fannie Mae/Freddie Mac obligations; (4) depositary authority; and (5) the designation of obligations as lawful investments. Amends the Federal Home Loan Bank Act to repeal: (1) the State tax exemption; (2) Treasury authority to purchase bank obligations; (3) depositary authority; and (4) the designation of obligations as lawful investments. Amends the Federal Reserve Act to prohibit Federal Reserve purchase of GSE debt. Repeals the eligibility of GSE obligations for unlimited investment by national banks, federally chartered thrifts, and credit unions.

[robc]

Like with SS, Bush was just a tinkerer at best. Probably why I dont remember his attempt to "rain" in F&F.

[John]

And Congress rejected even that "tinkering" as you call it that would have done some good. Given that fact, it is pretty hard not to blame Congress for the entire mess.

[robc]

Oh, I do. I blame them for almost everything.

[John]

And there is this from the above article

Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said.

[robc]

I agree with Watt here.

It was just regulatory shuffling. Unlike the Paul proposal.

[John]

But Watt is lying. If it was "just regulatory shuffling", why then did he think it would affect poor people's ability "to get affordable housing"? By its own terms what Watt is saying doesn't make sense.

It would have stopped the Fannie and Freddie gravy train and that is why Frank and Watt and the rest of their ilk killed it.

[robc]

Agreed, liars sometimes lie to telling the truth.

[robc]

"by telling"

[robc]

To clarify, only agree with the first part, not the "weakening the blah blah blah" part. Oh, it might be technically true too, but it would have been a good thing.

[AlmightyJB]

"include Congress in the indictment"

+10

[Ned Braden]

"Any idiot can get us into this sort mess. George Bush did. Barack Obama did. Who can get us out of this mess?"
-----------

Is the answer Jesus?

[Special Sauce]

As soon as he returns from the dead I will be sure to ask him... I'm not holding my breath.

[Jesus]

Screw you guys. You voted for them.

[robc]

I didnt. Browne/Badnarik/Barr.

[Pro Libertate]

Me, too. I haven't voted major party for president in a long time.

[robc]

1988 for me, which is why I go out of my way to support the Paul's. I owe him one.

[Pro Libertate]

Me, too. I voted for the Old Dude in 1984 and 1988. I wasn't that thrilled with him, but I hadn't realized that voting for the LP was an option at the time.

[robc]

Im trying to figure out what Old Dude you voted for in both 84 and 88. Reagan/Bush arent fungible.

Niether are Mondale/Dukakis.

1988 was my first eligible presidential election. I considered voting for Paul, he clearly best represented me, but I thought I was "throwing away my vote". Yeah, I dont fall for that bullshit any more.

[Pro Libertate]

Reagan, Bush, Bush, Reagan. The last presidents we had that were old in office. Beats the current trend towards voting for people with no relevant experience.

I was aware of the LP back then but also took the position then that I'd be wasting my vote. Little did I know that I was wasting my vote, anyway.

[R C Dean]

I vote Libertarian quite a bit, just to help keep them on the ballot.

One thing the "don't waste your vote" crowd always overlooks, is that voting third party actually helps with ballot access (depending on state law).

[Pro Libertate]

I agree. It's far more common to see the LP on ballots than it used to be, for instance.

I might vote in the general for a Republican if it's Gary Johnson or someone libertarian enough to make me think twice about voting LP.

[Tony]

It's obvious who is at fault here... 100% of the blame must be laid at the feet of all Republicans.

[Chad]

Teh externalities!

[Max]

ARFARFARFARFARFARFARFARFARF!!!!!!!!!!!!

[Wind Rider]

I'd rather blame Congress. They're the ones that do the money trick thing. Or at least I think so. Could swear I read that somewhere, but can't quite recall exactly where. . .

[Tony]

You morons think government budgets can be run like household budgets. How sad.

[Pro Libertate]

I don't think that. Once you add the magical pixie dust, government accounting is completely different than accounting for anything else.

[Tony]

The externalities on pixie dust are enormous.

[Pro Libertate]

I accept that statement.

[Old Mexican]

Re: Tony,

You morons think government budgets can be run like household budgets. How sad.

The sadder thing is that household budgets were being run like government budgets until just a short time ago.

The Laws of Economics do not suspend themselves just because Congress feels Keynesian today . . .

[Tony]

I can feel my ass hair starting to grow back in.

[Tony]

Libertarians are so childish.

[Hazel Meade]

Ya know, if Obama had actually cut spending, his election might actually have been the beginning of a long era od Democratic rule.

The gift that the Republicans should be thanking God for every day, is that he turned out be a classic tax and spend liberal. Thereby permenently confirming all the worst preconceptions about Democrats that Clinton spent 8 years trying to undo.

[MJ]

How could Obama have cut spending and remained true to his belief system? You cannot advocate massive new programs like health care without equally massive new spending. The Democrats base of voters would have seen any period of Democrat rule without expansion of government as a waste of effort and opportunity. Clinton did not try undo that conception about Democrats, in his first two years Clinton did his best to live up to that notion. The difference was that Clinton was a more amiable and effective liar, and he failed at getting the most radical of his agenda passed and so did not personally get blamed for it.

[Old Mexican]

In other words, if Obama had simply kept Bush's spending policies in place, federal deficits over the next eight years would be 60 percent lower. In 2018, we'd have a deficit of just $188 billion, instead of the projected $996 billion under Obama's budget.

The goal of any new president is to undo his predecesor's legacy, so Obama is simply undoing Bush's legacy of profligacy and show him as a fiscal conservative, through outspending him twofold.