Please forgive me. Over and over, I hear misinformation about
deficits in prior administrations, and I can’t keep quiet any longer. I
have to correct the record.
The latest was on “Squawk Box” on Monday morning. Joe Kernan, the host, is interviewing former Vermont Gov. Howard Dean, ex-candidate for president and chairman of the Democratic National Committee. Kernen cites campaign comments about “bad policies” going back “decades” affecting the high rate of unemployment today.
He asks, “What specific policies in the Bush Administration do you think are still being used to explain 8 percent unemployment?”
Dean responds, “The biggest ones are the deficits that were run up…. The deficits were enormous
Let’s shed some factual light on the situation by turning to table B-79 of the current Economic Report of the President. There we find the official statistics on federal spending, receipts, and deficits (or surpluses) as proportions of Gross Domestic Product. These are the figures that economists use in determining the relationship of the deficit to the overall economy, answering the question, “How much more are we spending than taking in?”
We can average the deficit-to-GDP ratio during a presidential term and get a good take on whether “deficits were enormous” in historic terms or not. The only tricky part is whether to give a president credit (or blame) for his incoming and outgoing years. For example, President Reagan took office on Jan. 20, 1980, but fiscal year 1980 started four months earlier. Similarly, he left office Jan. 20, 1989, but fiscal 1989 still had four months to run.
Read more: http://www.forbes.com/sites/jamesglassman/2012/07/11/the-facts-about-budget-deficits-how-the-presidents-truly-rank/
The latest was on “Squawk Box” on Monday morning. Joe Kernan, the host, is interviewing former Vermont Gov. Howard Dean, ex-candidate for president and chairman of the Democratic National Committee. Kernen cites campaign comments about “bad policies” going back “decades” affecting the high rate of unemployment today.
He asks, “What specific policies in the Bush Administration do you think are still being used to explain 8 percent unemployment?”
Dean responds, “The biggest ones are the deficits that were run up…. The deficits were enormous
Let’s shed some factual light on the situation by turning to table B-79 of the current Economic Report of the President. There we find the official statistics on federal spending, receipts, and deficits (or surpluses) as proportions of Gross Domestic Product. These are the figures that economists use in determining the relationship of the deficit to the overall economy, answering the question, “How much more are we spending than taking in?”
We can average the deficit-to-GDP ratio during a presidential term and get a good take on whether “deficits were enormous” in historic terms or not. The only tricky part is whether to give a president credit (or blame) for his incoming and outgoing years. For example, President Reagan took office on Jan. 20, 1980, but fiscal year 1980 started four months earlier. Similarly, he left office Jan. 20, 1989, but fiscal 1989 still had four months to run.
Read more: http://www.forbes.com/sites/jamesglassman/2012/07/11/the-facts-about-budget-deficits-how-the-presidents-truly-rank/
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