Wall Street Journal Editorial Distorts Deficit Record – Ignores What’s His Name

Contradictions Galore in Discussion of Government Spending and Taxes

Every now and then the editorial pages of the Wall Street Journal reach such heights of distortion and fallacies and deception that The Dismal Political Economist just cannot help noting it.  The great example this week is an editorial entitled

A New Spending Record

And the theme, in case anyone didn’t figure it out, which is unlikely, is that Mr. Obama is solely and totally responsible for the high federal deficit because of increased government spending.  Tax cuts had nothing to do with it (they never do for Conservatives).

The data that the Journal uses to support his conclusion is this table.

And their comment is this statement

The Obama years have racked up the three largest deficits, both in absolute amounts and as a share of GDP, since Hitler still terrorized Europe.

Except of course this is not what happened.

As noted several times on this Forum, the Federal Government operates on a fiscal year that begins on October 1. So 2009 began on October 1, 2008.  The President at that time was not Mr. Obama, he would not be elected until November 2008 and not take office until January 20, 2009 when the year was about one-third gone.  So 2009 is Mr. Bush’s deficit.  And of the last five years it is Mr. Bush’s deficit that was the largest. 

Of course, the editorial writers of the WSJ think that the public is stupid, and this view may be justified based on their confidence in writing stuff that just is not true and expecting their readers to believe it. 

The Journal goes out its way to exonerate the Bush tax cuts from any blame

The table also shows how close the federal budget was to balance as recently as fiscal 2007, with a deficit as low as $161 billion, or 1.2% of GDP. Those are the numbers to point to the next time someone says that the Bush tax rates are the main cause of our current fiscal woes.

But again those inconvenient facts keep getting in the way.  Bush inherited huge surpluses and obliterated them with tax cuts, primarily for the wealthy.  Revenues as a percent of GDP were about 19.5% in the last year of the Clinton administration.  In 2011 they fell to 14.5%.  Yes, spending increased, that is what it is supposed to do in a recession. 

So the facts are these.  Mr. Bush’s tax cuts resulted in a huge drop in tax receipts.  Mr. Obama inherited a budget deficit of $1.4 trillion.  Mr. Obama has reduced the deficit, but only by a small amount as he attempted to keep the economy from heading into a second Great Recession or worse.  Mr. Obama has enacted some tax cuts and spending increases, and the failure to reduce Mr. Bush’s record deficit by a substantial amount is partly, but only partly his fault. 

Mr. Clinton handed Mr. Bush a strong economy with budget surpluses as far as the eye could see.  Mr. Bush handed Mr. Obama a Great Recession with budgets deficits at $1.4 trillion and deficits as far as the eye can see.  Mr. Obama has not made the deficit appreciably better, but he has not allowed things to get worse.  The same cannot be said for Mr. Bush.

Any questions?  Didn’t think so.