Wednesday, April 28, 2010

What is everyone so angry about? Part 1

Anyone who listens to 2+ hours of conservative talk radio a day like I do can tell you that the Republican Party is defined above all by anger. What's frustrating being a liberal listening to these shows is that the vast majority of that anger is based on claims which are demonstrably false. Over the course of the next several posts, I'll show that Conservative claims that Obama exploded the deficit, that he "shoved ObamaCare down our throats", that we are overtaxed, that Obama is a socialist gobbling up banks and car companies, and that the solution to the deficit is spending cuts are all based on clearly incorrect ideas.

We'll start with Sean Hannity's daily claim that "Obama quadrupled the deficit!" Whenever Hannity is challenged on his frequent claims that Obama is a radical socialist, Hannity trots out this deficit lie as seeming proof of Obama being something peculiar and unprecedented in history. Other presidents have raised or lowered the deficit, the argument goes, but Obama QUADRUPLED it.

Portraying Obama's policies as out of line with any other administration in history is necessary for the conservatives' strategy of resisting absolutely everything the Democrats try to do. You can't refuse to compromise with your opponent unless they are seen as so extreme that even meeting them half-way would be a radical change. Convincing people that Obama quadrupled the debt goes a long way to making him too extreme to be bargained with.

Here's the calculation one has to do to arrive at "quadrupling". In February 2008, Bush's White House projected a deficit for the 12 months from October 2008 through September 2009 to be $407 billion. This number didn't include any of the $150 billion being spent in Iraq and Afghanistan that year, which as part of accounting tricks used to keep the headline deficit number artificially low, were funded via supplemental bills. $407 billion's a dishonest start, but at least it's a start.

In February 2010, Obama projected total debt for Fiscal Year 2010 of $1.6 trillion. As you might be aware, $1.6 trillion divided by $400 billion is 4. A talking point is born.

Of course, kind of a lot happened in the two years between the two budget projections (i.e., guesses about future deficits). Massive unemployment, which led to both a decrease in tax revenue and an increase in demand for government services, along with lost wealth exploded the deficit in the last months of Bush's presidency. In January 2009, before Obama took office, the Congressional Budget Office was projecting a deficit of between $1.2 and $1.3 trillion.

By the time Obama took office, we were losing ~800,000 jobs per month. Obama and the Democrats chose to follow good ol' Econ 101 Keynsian policies, by increasing deficit spending to spur growth in the economy. And so, the projected deficit bumped up by about $400 billion. Which is a lot. I'm not trying to convince you that Obama has been a deficit hawk. But it's only half the increase in the budget deficit that occurred under Bush.

It's much easier to refuse to negotiate with a Marxist than a Keynsian. To try to portray him as the former, Hannity and other conservatives cherry-pick numbers to arrive at claims that are removed from reality. They try to do this in order to further stoke the anger among the Tea Party. As we'll continue to discuss throughout this series, this anger is based on ignorance and misinformation, and is certainly not an appropriate basis for a political party.


Les Allen said...

Really glad to have you back, Jeff :)

Valerie said...

I think the more important question is why are you listening to that much conservative talk radio? You could melt you brain on that stuff.

westamastaflash said...

The problem with using deficit spending to "spur growth" - as has always been the problem with it - is that the government has to get that money from somewhere, reducing growth in either some other part of the economy, or by borrowing against the future (reducing future growth for short term growth).

Even if it works in the short term, as Keynes said - in the long run, we're all dead. The second half of that (which he didn't seem to have a problem with) is that we end up leaving a complete mess for the next generation. Debt eventually becomes a tinderbox (witness what's happening in Greece right now). When America eventually hits that wall, there will be *no* one else to bail us out.