Glenn "Insta Pundit" Reynolds's latest USA Today column looks more closely at the ups and downs of the federal deficit.  Start with a chart.

Note that receipts started heading downward before George W. Bush assumed the presidency, but the gap started narrowing despite tax cuts and war.  Here's Mr Reynolds's interpretation.
In 2003, when we invaded Iraq (one of those "two wars on the credit card" that Obama likes to blame for the debt), and when we passed the Bush tax cuts (the other thing Obama likes to blame for the debt) revenue actually started to climb. The revenue and spending lines start to converge, and, as they head up to 2006 it actually looks as if the two might cross, with revenue outpacing spending.

Even the New York Times noticed, spotting unexpected increases in revenue in 2005, and in 2006 noting that a "surprising" increase in tax revenues was closing the budget gap. The heady possibility of surpluses was in the air. But -- look at the graph again -- everything changes in 2007.

What happened in 2007? The financial crisis hadn't struck yet. But we did elect a new Democratic Congress, with Democrats controlling both houses for the first time in over a decade. The trend immediately reversed, and became much worse with President Obama's election in 2008 and inauguration in 2009. (In fact, despite talk of "wars on the credit card," we could save a lot of money by cutting defense spending back to where it was in 2007.)

So does that mean that the ballooning debt is all Obama's fault? No. Most of those spending bills got Republican votes, too. But it does mean that, as Politico notes, Obama now owns the 60% increase in the debt that has occurred on his watch, and can no longer credibly blame Bush (under whom plenty of Democrats voted for spending bills).
Those Democratic majorities in the House and Senate, and a President Bush burdened with his compassionate conservatism and beset with criticism over the wars against terrorism and the recovery from Katrina and Rita, well might have put in places fiscal policies and spending programs that rendered the economy weaker in the face of bursting financial bubbles.  There might be some productive research in progress on that link, or not.

No comments: