October 21, 2013

Fiscal Fantasies at the LA Times

Historical revisionism with a rose-colored crystal ball at the LA Times.

_____________________________________

This column went up at PJ Media and was teased here at BizzyBlog on Saturday.

_____________________________________

Miscasting the results achieved during the presidency of George W. Bush is one of the more important elements of the national establishment press’s non-stop attempt to defend Barack Obama’s utterly indefensible fiscal record.

David Lauter’s contribution to that effort appeared at the Politics Now Blog at what remains of the Los Angeles Times on October 16. He claimed to be conveying “Four facts about the national debt you may not know.” Readers could have and should have stopped at Item 1. Combined with the Bush 43 historical revisionism contained within that assertion, Lauter concocted the Certs Breath Mint of falsehoods: “Two Lies in One.”

This isn’t about a newbie journalist just out of college. Lauter is an assistant managing editor who is old enough to remember those Certs commercials. In his position, he “oversees the Times’ coverage of news across California, heading the news organization’s largest editing and reporting staff.”

Lauter’s opening pseudo-fact is that “The U.S. debt burden is starting to decline.” Not “will decline in the future” (which itself is almost definitely not the case, as will be seen later), but “is starting to decline.” No such decline is underway, even under Lauter’s permissive definition of “burden,” which is “debt held by the public as a percentage of gross domestic product (GDP).”

The Congressional Budget Office Baseline Budget Projections to which he links tell us that public debt to GDP was 72.6 percent at the end of fiscal 2012, will be 75.1 percent when the government finally closes its books on the September 30 fiscal year with just ended, and will be 76.2 percent at the end of fiscal 2014. Without identifying the specific values, Lauter says that the 2014 value, at 1.1-points about 2013, will be “at about the same level.” That’s quite ironic, considering his characterization of what happened during Bush 43′s presidency:

By that measure, the debt grew rapidly during most of President George W. Bush’s tenure and President Obama’s first term as the government borrowed money to fight two wars and the deepest recession in more than half a century. But the rapid growth ended more than a year ago.

While there is little argument that George W. Bush’s fiscal stewardship was far from ideal, Lauter’s claim of rapid growth “during most of President George W. Bush’s tenure” is brazenly and outrageously false. His breezy attempt to make what occurred during the Bush 43 era roughly equivalent to what we’ve seen during Barack Obama’s presidential tenure compounds the deception, as the following table demonstrates:

Bush43andObamaDebtVsGDPto0913

Using the results of full budget years and assigning responsibility by presence in office, the table shows that there were decreases or negligible increases in public debt to GDP during 44 of Bush’s 96 months. There were increases of between one point and two points, which by Lauter’s aforementioned standards are clearly not significant, during another 36. Only 16 percent of Bush’s two terms contained full or partial fiscal years with public debt-to-GDP growth of two points or more, and only his final four months saw the kind of rapid annualized growth (5 points or more) seen during over half (57 percent) of Barack Obama’s presidency to date.

But what if one were to assign presidential responsibility based on budgets passed — or in Obama’s case, fiscal auto-pilot exercises conducted — during their respective terms? This would give Bill Clinton credit for Bush 43′s first eight months of public debt-to-GDP decline, and would blame Bush for Obama’s first eight disastrous months, despite the Texan having no involvement in 2009′s deficit- and debt-driving stimulus plan. Even in that tortured framework, six of the eight budgets for which Bush was supposedly responsible showed public debt-to-GDP decreases or small increases. Such increases during Obama’s presidency have all ranged from large to very large.

Here is how it all looks when presented in a chart:

Bush43andObamaDebtVsGDPto0913chart

It’s quite obvious that the vast majority of Bush 43′s presidency was marked by modest growth in public debt as a percentage of GDP, and that things did not begin to get out of hand until the first full budget year after the Democratic Party took control of the House and Senate. Absolutely all of Barack Obama’s presidency has seen catastrophic growth in that percentage.

There is almost certainly no end in sight in debt-to-GDP growth, despite Lauter’s contention, presented as if factual, that “the debt will tick down slowly to around 71% of GDP in 2018.”

CBO’s projections assume annual nominal GDP growth of 5.9 percent or more, or well over 3 percent after inflation, during each of the three fiscal years ending in 2017. In the four years since the recession officially ended, the economy has grown at a compound annual rate of 2.2 percent.

What in the world is there on the economic policy front which would give anyone but a blind leftist partisan the idea that stronger economic growth is on the horizon? Is it the relentlessly growing army of Obamacare part-timers? The mind-boggling incompetence of the Obamacare rollout? The plundering of red states, the young and self-employed upper middle-class hard-wired into Obamacare itself? The EPA’s war on coal and fossil fuel-based energy? Beyond that, for CBO’s projections to come true, the Fed’s relentless generation of money from nothing must continue to keep interest rates historically low. There have already been signs of serious weakening on that front.

Lauter’s background clearly establishes not only that he should know better than to compose and publish such rubbish, but that he also does know better. So apparently he doesn’t care that he has presented self-evident lies. Work such as his goes a long way towards explaining why daily circulation at the Times, which was 900,000 in 2006, was only 494,352 as of March 31.

That’s clearly 494,352 too many.

Share

No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.