Giving Whitehouse an Easy Go
Although Arlene Violet subsequently whacked him with a great question about using stimulus money to suppress changes to teachers’ healthcare benefits, I’m very disappointed that the Newsmakers gang let Sen. Sheldon Whitehouse ramble on with this partisan mumbo-jumbo for three minutes:
I think it’s sort of an ironic moment on this subject, and particularly to the extent that the tea party was orchestrated through the Republican Party and its organizations, because here we are in a bleak recession, which is the one time when economists agree that federal spending is really important, even when you have to borrow to spend, because families are contracting their budgets, businesses are contracting their budgets, states and municipalities are contracting their budgets, and so the whole economy contracts and collapses unless the federal government can engage in what they call “countercyclical spending” to moderate the downturn. So, this is the one time when it really makes sense.
When George Bush took office, we were headed for being a debt-free nation now. The non-partisan Congressional Budget Office took a look at where the budget was when President Clinton left it, and we were in surplus, and we were headed for debt-free, and in eight years, George Bush changed that, nine trillion now, 8.9 trillion, to be specific, and that was fair-weather times. That was money for everybody. That was Wall Street on a roll, and he spent that 8.9 trillion on things like a war in Iraq and letting Wall Streeters rake in billions of dollars and get their taxes reduced while they were doing that.
So, there’s a kind of sad irony in, now that we need it, people becoming so upset about the federal spending when nobody really paid attention to it, and there weren’t tea parties going on when George Bush was running up $9 trillion in debt to give tax breaks to Wall Street millionaires.
First of all, the Republican Party did not “orchestrate” the tea parties. Watch, for evidence, big-spending Republicans being booed at them across the country.
On the financial points, what is Whitehouse talking about with that $8.9 trillion? The total national debt now stands at $11.1 trillion (PDF). When President Bush left office, it was $10.6 trillion (PDF). But when Bush took office, it was $5.7 trillion.
It risks a fatal tangent, but it’s worth noting that this number includes intragovernmental holdings, most notably the infamous Social Security IOUs. Such internal borrowing is not typically included in annual deficit numbers. In a sense, the government owes this money in promised services, but there aren’t lenders with bills for eventual payment. Excluding this total, the debt under Bush grew from $3.4 trillion (9/29/00) to $5.8 trillion (9/29/08).
Whether we count the increase in the debt as $4.9 trillion or $2.4 trillion, it’s still too much — anything above zero is too much — but it simply isn’t true that the federal government under President Bush ran up “$9 trillion in debt.” It’s a lie. And it doesn’t take into account the fact that about half of the increase — by either measure — occurred during the two of Bush’s eight years during which Democrats controlled Congress, which controls the federal purse.
Moving on to Whitehouse’s assertion of Wall Street’s being on “a roll” during the Bush presidency enables a nice return to the notion of that “countercyclical spending” of which he’s so fond. In actuality, the DOW dipped about 2,000 points around the time of 9/11, recovered some, and then spent much of 2H02 and 1H03 even lower. According to the federal Bureau of Economic Analysis, private domestic investment dipped from 2001 through 2003. During and beyond this period, government revenues plummeted.
Bush and the Republican Congress increased outlays at the outset of this downturn and held them reasonably steady as a percentage of GDP. (The fiscal conservative in me, though, is still inclined to complain that outlays went up steadily in absolute terms no matter the economic situation, PDF.) Then the economy improved. Consequently, the deficits under Bush show a U pattern, maxing out in 2004 and then heading back toward zero, until the recession began to really sink in in 2008.
An inconceivable number of factors come into play, here, but the point is that, if you buy Senator Whitehouse’s economic excuse for the Obama-Dem spending spree (which I don’t), the Bush years would have to count as a prime example of mitigating recessions through government spending. This intellectual necessity is evidenced most strongly in the fact that the dot-com bust, an unprecedented terrorist attack in the U.S. financial core, and years of war did not prevent those years from being such that Whitehouse speaks so glowingly of the economy, then.
Even so, in the graphic shown at that last link, the jaw-dropping difference between the Bush deficits and those projected for Obama and beyond makes so much mumbling of Whitehouse’s chatter. The Congressional Budget Office expects most of the next decade to have annual deficits that more than double Bush’s worst year.
It’s understandable that the journalists wouldn’t have had the information at hand to rebut the Senator’s talking-points nonsense on air, but Whitehouse was sufficiently brazen that they should have recognized a need for him to explain his numbers. Maybe an inevitable stumble or two would have at least given viewers a sense that he wasn’t rolling through economic gospel truth.