Friday, October 14, 2011

Mr. President: Would You Like Some Cheese With Your Whine? Part 2, A Historical Perspective


Yesterday we looked at how insanely immature the Obama administration is when it comes to blaming others for its own misgivings and missteps. Of course, the most popular person to blame for all of Obama's problems is former President Bush. If you believe the administration spin doctors, Bush and Bush alone, is responsible for every ailment facing America and the reason why the Obama administration has been such a failure.

Before we look at the actual history leading up to President Obama's inauguration, let me lay some background. I was never a big fan of President Bush. I did not vote him either time, his invasion of Iraq was totally unnecessary and will burden future generations with debt for a long time, and his administration did very little to mitigate or resolve the major issues of our times including failing public schools, a lost war on drugs, growth in government spending, leaky borders, etc. I do not take pleasure defending him in any way, like I am likely to do below.

But the Obama administration needs to be taken to task for not assuming leadership and responsibility for its errant ways while it spends so much time blaming Bush and others for his failures, time that would be better spent learning from its mistakes and moving forward in a positive way. Unfortunately, escaping blame is President Obama's only mode of operation, solving problems is not.

So is Bush to blame for all of Obama's problems if we look at history? It appears not, given the following graphs. The first three graphs come from the website, http://www.usgovernmentspending.com/, which does a great job of downloading, formatting and providing easy access to official government statistics.

And this is important if you are looking for the truth. The data below is not from the Republicans, Fox News, the Tea Party, or other conservative political sources, these are official government documents and statistics of our country's financial history. The fourth set of data on unemployment comes from the U.S. government Bureau Of Labor Statistics.

I apologize for the less than professional formatting of the graphs, I am not a computer wizard or blog wizard. However, it appears that if you double click on each graph it will enlarge itself in a new window for easier viewing.

Let's start with this first graph, it graphs out the annual Federal government budget deficit over the past 21 years. One of Obama's favorite blame games is to attack Bush for leaving Obama with outsized budget deficits:

We can we learn from this graph:

  • We see that at the end of the Clinton administration, the Federal government budget deficit was actually a surplus, kudos to the end of the Clinton years.
  • While the Bush administration did run a deficit for its entire time in office, those deficits rose early in his term to counteract the recession early in his term but continued to decline steadily through 2007, to a point where the 2007 deficit was lower than some of the deficits early in the Clinton administration.
  • However, as a result of the November 2006 elections (marked by the vertical black line between the years 2006 and 2007), the Democrats took over both houses of Congress, so that beginning in 2008 (the 2007 budget was already set when the Democrats took control in January, 2007), Federal government budget deficits were also the responsibility of the Democrats controlling Congress, where budgets are developed and voted on.
  • However, beginning with 2008 and through 2011 (estimated), the budget deficits skyrocketed to over a TRILLION dollars a year, three to four times higher than during the Bush administration BEFORE the Democrats took control of Congress and the nation's budget process.

So who is more to blame, the Bush administration who had the deficits pretty much in line with historical deficits and whose annual deficits were trending down while the Republicans controlled Congress, the Congressional Democrats where we see that the budgets really got out of control after they took control of Congress (of which Obama was a voting member), or both Bush and the Democrats?

I vote for "both" since neither party, Bush or the Democratic Congress, could have increased spending and the resultant deficits so much without each other's approval.  Thus, if Obama wants to blame Bush for escalating deficits, he also has to assign equal blame to Reid, Pelosi, and Democratic Congress people since they took a downward trending deficit picture and shredded it so much that we are now stuck with TRILLION dollar annual deficits.

Let's look at the data another way just to make sure. The following graph views the annual deficits as a percentage of our country's annual GDP, a supposedly standard way to look at governments' deficit spending:



My understanding is that the standard benchmark is that a nation's annual deficit should be no more than 3-4% of its GDP. This graph shows basically the same picture as the first one:

  • Budget surpluses late in Clinton's term.
  • A deficit to GDP ratio that is within the acceptable limits during Bush's terms and trending downward later in his administration.
  • However, once the Democrats take control of Congress in 2007, we see the ratio skyrocket to dangerous levels beginning in 2008, the first year that the Democratically controlled Congress put together a budget.
  • Thus, within two years the Federal government's deficit to GDP ratio went from an acceptable 3-4% to a very scary 10% or so.

Who is to blame for the near tripling of the ratio? If Obama wants to blame Bush, he also has to blame Reid, Pelosi, Democrats, and himself, all who had a hand in the disaster starting with their first budget submission and approval in 2008.

Let's try another look at some slightly different data. The following graph looks at government spending as a percentage of GDP. We see the same picture. During the time that the Republicans controlled Congress and Bush was President, this ratio of spending to GDP was remarkably consistent across the Bush years and was consistent with the past twenty years.

However, once the Democrats take control of Congress in 2007, the ratio starts to escalate far beyond the historical norm. Again, you cannot blame Bush for this explosion of spending when the Democrats controlled both houses of Congress and eventually the White House.




One final graph and set of data to look at. This one tracks the annual average unemployment rate over the past twenty years or so. Same pattern, an increase early in the early Bush years as the country recovers from recession and the 9-11 implications and trends steadily downward through 2007.

By 2008, the first year that Democrats controlled Congress, unemployment begins to escalate to the higher than acceptable levels we have today. Whose fault? Everybody, including Obama, Reid, Pelosi, and the Democrats in Congress.




And that is the true lesson. The entire political class is responsible for getting us in our current economic malaise, it was not only Bush. He was just one part of government, an economic screw up this bad required the entire body of government to screw up including Bush, the Democrats who controlled Congress, Obama, the Federal Reserve, the Treasury Department under Bush and Obama, Fannie Mae, Freddie Mac, FDIC, SEC, FHA, HUD, Congressional oversight committees and subcommittees, etc.
But Obama has to step up, accept his share of the responsibility, stop the blame game, and stop being in constant class warfare campaign mode. Come up with some real economic solutions, beyond a "millionaires tax" and a lame jobs bill, that will actually solve our economic problems. That would be his best campaign program possible.

Because, the more Obama talks about blaming Bush and the deficits Bush left him, the more the truth will come out as stated above. Plus, the Treasury Department announced this week that in just three years, the Obama administration has increased the national debt more than every President starting with George Washington through the first Bush Presidency that ended in 1992. Quite an infamous economic record this President has:

- First President to see the country's debt quality rating downgraded.
- The longest run of post recession high unemployment in the nation's history.
- Has added more debt than the first 41 Presidents combined.

So, Mr. President, stop the blame game, stop the class warfare, and step up and be a leader. Start looking forward for answers for the first time ever rather than continually looking backward to place blame. Otherwise, can I offer you some cheese with your whine?

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