Q for Peter Puget: re: deficit, media bias

[chucK]

Hey Peter Puget or perhaps others who profess to understand these economic numbers. Here's what

Rush writes:

 

"Kennedy kept trying to swerve away from the question, saying that Bush wasn't a conservative because he'd turned our (on-paper-only) surplus into the greatest deficits in the history of our country -- not as a percentage of GDP of course, which is the only way to judge such things. By that measure, the deficit is tiny.

 

 

Peter, is the italicised statement truthful? I was somewhat aware that our record deficit is a record in absolute terms but not in terms of % of GDP, but is it accurate to classify it as "tiny"? Isn't it still pretty far up there in the ranks of all past deficits?

[murraysovereign]

The only reference I found - in an admittedly very brief search - was in a Toronto Globe & Mail article discussing this week's federal budget presentation. It reports that Canada'a debt-GDP ratio is projected to be 34% in 2004. By contrast, the U.S. "is now expected to reach a debt-GDP level of 48.9 per cent in 2004." (source)

 

I don't know what is considered an appropriate level, but I'd say even 34% is still significant, so describing 48.9% as "tiny" is a bit disingenuous.

[Peter_Puget]

Check out tables 1.2,1.3,7.1 here

 

What does tiny mean? I don't know but the deficit as a % of GDP is not out of control.

[Peter_Puget]

Here's some cool data. Check out the attached graph!

 

 

There were two distinct periods of poverty decline in the US, one ending about the point Johnson's "War on Poverty" began, the other starting just at the starting point of Clinton's welfare reform.

[Jim]

Only one minor problem here - the bushies, through some infinite wisdom - have taken the war in Iraq and Afganistan OUT OF THE BUDGET!!

 

This will be a "special budget appropriation". Charming. And of course they low balled the estimate for the Medicare drug bill, and don't include that at all because it will not kick in fully for a few years, conviently after the election.

 

So the answer is yes, this administration is the largest budget deficit, even when compared to historical GDP. What is stunning is how fast it took these clowns to break the bank.

[Peter_Puget]

Jim sorry but you are completely full of shit when you sday this "So the answer is yes, this administration is the largest budget deficit, even when compared to historical GDP. " Does honesty even matter to you?

 

Of course I guess it does matter which historical gdp you are comparing to!

 

PP

Edited March 25, 2004 by Peter_Puget

[Jim]

Sticks and stones Peter. You're wrong again. Take time away from your right wing newsletters, read, and try and analyze the numbers. I have faith you can manage it.

 

In the 2000 campaign, Vice President Al Gore said we should sequester the Social Security surpluses in a "lockbox" to prevent appropriators from spending them. Bush agreed in principle. But that commitment went out the window soon after the inauguration. In his first three budgets, Bush (who had the good fortune to take office at a time when the surpluses were growing rapidly) and Congress used $480 billion in excess Social Security payroll taxes to fund basic government operations—about $160 billion per year!

 

By so doing, Washington spenders have masked the size of the deficit. For Fiscal 2004—which began in October 2003—if you factor out the $164 billion Social Security surplus, the on-budget deficit will be at least $639 billion, rather close to the modern peak of 6 percent of GDP. And according to its own projections (the bottom line of Table 8 represents the Social Security surplus), the administration plans to spend an additional $990 billion in such funds between now and 2008. That year, according to the Office of Management and Budget's projections, the on-budget deficit will be about $464 billion. Only by using that year's $238 billion Social Security surplus does the administration arrive at a total, unified deficit of $226 billion. And the ultimate on-budget deficit will almost certainly be worse. OMB has proven in the past few years that its projections can't be trusted.

 

Add on the cost of our ongoing adventures in Iraq, and the more necessary but costly military action in Afganistan and the bushies are pegging the meter.

[Jim]

shoot - here's the link for the table

 

http://www.whitehouse.gov/omb/budget/fy2004/summarytables.html#table8

[Peter_Puget]

I suggest you look at the war years in the 40s.

[Jim]

And I suggest you get out the calculator if you can't manage the math. Take out the SS trust fund then add these approximate estimates from the CBO (likely low) for the war costs

 

Six week war estimates 80 Billion

Five years of peacekeeping - 500 billion

 

And these are just for Iraq. Then add in the Medicare costs and, oh, say 130 billion (at least) for 4 yrs of Afganistan and then we can chat some more. Otherwise, hop on the clue train, it's leaving the station.

[Peter_Puget]

Jim sorry but you are completely full of shit when you sday this "So the answer is yes, this administration is the largest budget deficit, even when compared to historical GDP. " Does honesty even matter to you?

 

Of course I guess it does matter which historical gdp you are comparing to!

 

PP

 

Come on Jim you are making a simple statement here regarding the size of the deficit. Certainly you must have made a calculation to know you are correct. Show us the math!

 

[Jim]

Ok one last try here, I can't spoon feed you any longer, I've got a deadline. Look at the attached OMB table (8) and then add the following, which is not accounted for.

 

Medicare and SS - trust fund benefits that are front loaded into the current budget to make the deficit APPEAR to be smaller. Take these out. Currently about 30% of the budget, then add another 5%(conservative) for the increase in Medicare costs.

 

Add the costs of Iraq and Afganistan, likely around another 15%.

 

The current estimate is around a 6-8% estimate of deficit, add in these hidden costs and yes, you do rival WWII deficits, which were approaching 40% of GDP. What is even scarier is that we're also approaching the GDP records for total debt/GDP, which is one big hole to dig out of.

 

Peter-you may be confused by the bushies attempts to hide the true defict numbers by 1) optimistic projections regarding job growth and tax revenue (I think they added one job in Tacoma last year) 2) Refusal to include costs of Iraq and Afganistan in the budget estimates, 3) using the ss and medicare trust funds to pad the budget, and 4) low balling the estimates for medicare costs on the horizon.

 

Turn off Rush and work through this, it's not hard.

[murraysovereign]

What does tiny mean? I don't know but the deficit as a % of GDP is not out of control.

 

Let's look at this from a slightly different perspective, in keeping with the thread title's reference to the debt and media bias. Let's imagine that, hypothetically, we're talking about debt-gdp under a former president, say... Clinton. If the debt-gdp under Clinton was 48.9%, what words would Rush Limbaugh be using to describe it? I'm willing to bet that "tiny" wouldn't be one of them.

[Peter_Puget]

Sorry Jim you're out to lunch.

 

Murray -don't confuse the deficift with the O/S debt.

 

PP

[murraysovereign]

Aha! My bad - first time reading Rush I could have sworn he referred to "debt", not deficit. Mea culpa. Still, according to the files you cite, the projected deficit for 2004 is tied for 7th-highest post-war deficit as %gdp. So it isn't a record, but if it placed much higher it'd have to submit to a mandatory urine test.

 

And the deficit and debt are not exactly unrelated, are they? If the US was debt-free, then running the occasional deficit wouldn't be a problem, but there is a substantial accumulated debt which means further annual deficits are a problem. Taken in isolation, the annual deficit may be "tiny", but when you add it to all the other "tiny" deficits, you end up with a 48.9% debt-gdp ratio, and it's increasing.

 

And I stand by my contention that Rush and his ilk would be far less forgiving if these deficits were occurring under a Democrat president. The simple fact is that Rimbaugh bases his positions not on principles, but on partisanship, and his pronouncements are just as suspect as Al Franken's or Michael Moore's.