Many years later, as he faced the firing squad, Colonel Aureliano Buendia was to remember that distant afternoon when his father took him to discover ice

(Updated:  2:37 p.m. EDT.)

by von

More on President Obama's deficit crisis:

Alan Auerbach, an economist at the University of California, Berkeley, and an author of a widely cited study on the dangers of the current deficits, describes the situation like so: “Bush behaved incredibly irresponsibly for eight years. On the one hand, it might seem unfair for people to blame Obama for not fixing it. On the other hand, he’s not fixing it.”

“And,” he added, “not fixing it is, in a sense, making it worse.”

That's part of the problem:  a legacy of irresponsible spending by Bush that Obama has yet to address. But the New York Times' analysis (replicated by Matt Yglesias as a pie chart) is more about deflecting the blame from Obama than soberly assessing the problem.  Yglesias is right that the current "large" -- really, unprecedented -- "deficits aren’t a moral failing that we need to hold someone accountable for."  But solving the problem requires that we soberly assess the role of Obama's agenda in growing the national debt.

I'm going to take the New York Times' analysis as it is, and not check the underlying work.  Based on the New York Time's analysis, causes of the swing from surplus to this year's (2009's) deficit can be broken into three components [modified]:

• The recession, which resulted in lower tax receipts and accounts for approximately a third of the current deficit.
• Bush-era programs that Obama either cannot or chooses not to eliminate or modify, such as the prescription drug plan.  This represents another third of the current deficit.

• Programs that Obama either endorsed or proposed -- another third of the current deficit.

[UPDATE:  It's not clear from New York Times article but, as this chart makes clear, these three components actually caused a swing from a $800 billion surplus to a $1.2 trillion dollar deficit.  Put another way, the three above components total approximately $2 trillion -- $800 billion more than this year's deficit. If you could magically eliminate the recession and all the listed spending, we'd be $800 billion in the black.  The fact that the NYT purports to describe the swing from surplus to deficit rather than just the causes of the deficit seems to have tripped up Yglesias as well.  That puts me in good company, and suggests that the New York Times should have done a better job editing its article.  In any event, the change actually strengthens my point.]

That is, under the New York Times' accounting, up to two thirds virtually all of this year's deficit comes from programs under our control.  (Our control over future deficits is greater, as is the percentage attributable to Obama's programs in those future; it bears noting that those future deficits are considerable.)

You wouldn't know this, however, from either the New York Times' article or Yglesias' pie chart.  The confusion is most apparent in Yglesias' chart.   

 

[UPDATE: As noted, it's not "contributions to the deficit," as Yglesias has on the chart, but contributions to the swing from $800 billion surplus to $1.2 trillion deficit.]

Yglesias puts the recession in blue on his chart. Fair enough.  But there's no acknowledgment in either his chart or his piece (which you should read in full) that whether we continue "Bush's policies" -- the part in red -- is wholly within the control of the Obama Administration and the near-supermajority of Democrats in Congress.  

True, many of these policies cannot be changed in the short term without incurring even more cost.  It's unfair to say that Obama is morally responsible for this spending.  But this isn't about assigning moral responsibility; it's about cutting a deficit -- including spending -- that has gotten out of control.  For example, if health care is going under the knife, and I fear that it is, Bush's costly prescription drugs plan should be on the operating table with it. 

It is also unhelpful to divide the share of the deficit that is unambiguously part of Obama's agenda -- and easiest to change -- into three slices (yellow, green, and grey) and then argue, as Yglesias does, that Obama's agenda is reflected only in the smallest (grey) slice.  That's can't be right:  The stimulus package is clearly part of Obama's agenda:  Obama proposed, fought for, and signed it.  Whose agenda was it, if not Obama's?  So are the policies that Bush proposed but that Obama adopted as part of Obama's agenda (yellow).  Slice it however you like, a third of 2009's deficit is caused by Obama's agenda -- which also accounts for proportionately more in future deficits.

Yglesias is correct that we need to treat today's and tomorrow's deficits as "a ... practical problem that will have to be solved."  To do that, we can't start by pushing the blame for the vast majority of today's deficit onto someone else when much of it is under our -- and Obama's -- control.

Comments

[peter jackson]

"An assertion totally empty of any meaningful content."

Except it's not an assertion, I explained exactly what I meant; you simply chose to to ignore what I wrote.

thanks/
peter

[Brett Bellmore]

Nah, he's been had: Even if corporations aren't treated as people, they're owned by and operated by people, and THEY have constitional rights. So he doesn't get much out of the concession.

It's kind of like the exclusionary rule: If you're not going to just ignore the Bill of Rights, the alternative to it is going after cops who violate rights, not just keeping the evidence, and leaving everything else the same.

[mds]

Between the mounting interest on the debt and the open-ended entitlements we've voted for ourselves, we've gotten to the point where we aren't willing OR able to pay it back.

See, this isn't actually an explanation, but another assertion. And given that it's an assertion made in light of a projected scenario where the deficit grows to 6% of GDP, I'm not certain where exactly it's coming from.

We are nearing that limit.

Could you be more precise about the dollar value of that limit? In order to make it something more than an assertion?

The only question now is how much inflation the Obama administration is going to print before they get a clue.

...Okay, I'm not sure if this is supposed to count as an explanation, or an assertion of ignorance about current inflation and the money supply. At least you didn't mention how we're basically Zimbabwe. Yet.

[Francis D]

I've got my own opinon on the flagrant dishonesty in the US system of government. It has something to do with the fact that one of the two major political parties tries to run the government while claming that government is the problem. They are therefore ideologically opposed to the job they are elected to do. Pure doublethink.

[Gus]

Can I just say I hate "100 Years of Solitude"? Never could get through the whole damn thing even after a few tries.

[russell]

"So he doesn't get much out of the concession."

For my purposes, I'd get a lot.

"Can I just say I hate "100 Years of Solitude"?"

Dude, that was the fun one. "Autumn Of The Patriarch" will make you beg for mercy.

And for the record, I like both books. I'm just saying.

[[NOT]Francis D.]

Follow the link below. You won't be sorry!