Obama's Economic Record

Yep... the WSJ and I take on the Obama Economic Record...

A question raised by President Obama's immortal line on CBS's "60 Minutes" on Sunday...

"I think that, you know, as President, I bear responsibility for everything, to some degree"

...is what that degree really is.

Maybe 70% or 80% of the buck stops with him?

Or is it halfsies?

Nope.

Now we know: It turns out the figure is 10%. The other 90% is somebody else's fault.

Folks... let's start with five points to reflect upon: 1) Bush and the RINOs controlled the executive and legislative branches from January 2001 thru the first half of January 2007; 2) Harry Reid, Nancy Pelosi, and the Democrats controlled both houses of Congress from the first half of January 2007 thru December 2010; 3) Barack Hussein Obama was a serving United States Senator from January 3, 2005 thru November 16, 2008... a Senator with a record... a Senator who voted for TARP... a Senator whose voting record reflects support not only for most "Bush" spending, but for pushes to go beyond most "Bush" spending; 4) Obama was President, Nancy Pelosi was Speaker of the House, and Harry Reid was Senate Majority leader from early January 2009 thru December 2010; 5) Harry Reid is still Senate Majority Leader and the Democrats have continued to control the United States Senate throughout the entire Obama presidency.

This (90% is somebody else's fault) revelation came when Steve Kroft mentioned that the national debt has climbed 60% on the President's watch.

"Well, first of all, Steve, I think it's important to understand the context here," Mr. Obama replied.

Fair enough, so here's his context in full, with our own annotation and translation below:

"When I came into office, I inherited the biggest deficit in our history.[1] And over the last four years, the deficit has gone up, but 90% of that is as a consequence of two wars that weren't paid for,[2] as a consequence of tax cuts that weren't paid for,[3] a prescription drug plan that was not paid for,[4] and then the worst economic crisis since the Great Depression.[5]

"Now we took some emergency actions, but that accounts for about 10% of this increase in the deficit,[6] and we have actually seen the federal government grow at a slower pace than at any time since Dwight Eisenhower, in fact, substantially lower than the federal government grew under either Ronald Reagan or George Bush.[7]"

Footnote No. 1: Either Mr. Obama inherited the largest deficit in American history or he won the 1944 election, but both can't be true. The biggest annual deficit the modern government has ever run was in 1943, equal to 30.3% of the economy, to mobilize for World War II. The next biggest years were the following two, at 22.7% and 21.5%, to win it.

The deficit in fiscal 2008 was a mere 3.2% of GDP.

And frankly, folks... in line with my five points up above... a true "apples to apples" comparison would be the FY2007 "Republican" budget (which went into effect in October 2006 when Republicans still controlled both houses of Congress) vs. the FY2009 "Democratic" budget (which went into effect when Bush was president even though Democrats controlled both houses of Congress) and best yet... vs. the FY2010 budget which was a true reflection of an "all Democrat" budget agreed to between Democrats Obama, Reid, and Pelosi - which so too was the FY2011 budget.

The deficit in fiscal 2009, which began on October 1, 2008 and ran through September 2009, soared to 10.1%, the highest since 1945.

(*SHRUG*)

Mr. Obama wants to blame all of that on his predecessor, and no doubt the recession that began in December 2007 reduced revenues and increased automatic spending "stabilizers" like jobless insurance. But Mr. Obama conveniently forgets a little event in February 2009 known as the "stimulus" that increased spending by a "mere" $830 billion above the normal baseline.

The recession [officially] ended in June 2009, but spending has still kept rising.

The President has presided over four years in a row of deficits in excess of $1 trillion, and the spending baseline going forward into his second term is nearly $1.1 trillion more than in fiscal 2007.

Federal spending as a share of GDP will average 24.1% over his first term including 2013.

Even if you throw out fiscal 2009 and blame that entirely on Mr. Bush, the Obama spending average will be 23.8% of GDP. That compares to a post-WWII average of a little under 20%.

Spending under Mr. Bush averaged 20.1% including 2009 - and 19.6% if that year is left out.

And, again, folks... even prior to 2009... the FY2008 budget was an instrument of the Democratic controlled Congress led by Harry Reid and Nancy Pelosi! Indeed, folks... starting in January of FY2007 the Democrats could have forced cuts in the existing budget blueprint! They didn't, though... did they...?!?!

Footnotes No. 2 through 4: Liberals continue to claim that the main causes of the current fiscal mess are tax rates established in, er, 2001 and 2003 and the post-9/11 wars on terror.

But by 2006 and 2007, those tax rates were producing revenue of 18.2% and 18.5% of GDP, near historic norms.

Oops!

Another quandary for Mr. Obama's apologists is that he has endorsed nearly all of these policies.

Oops, again!

The 2003 Medicare drug benefit wasn't offset by tax hikes or spending cuts, but Democrats expanded the program as part of ObamaCare.

(*SHRUG*)

And recall, folks... the Democrats main "complaint" about Bush's Medicare drug benefit add-on is that supposedly it was too stingy!

The President also extended all the Bush tax rates in 2010 for two more years in the name of helping the economy, and he now wants to continue them for people earning under $200,000, which is where 71% of their "cost" resides.

The Iraq campaign was won and beginning to be wound down when he took office, and he himself surged more troops in Afghanistan.

Footnote No. 5: Mr. Obama keeps dining out on the excuse of the recession, but [the recession officially] ended halfway through his first year.

The main deficit problems since 2009 are a permanently higher spending base (see Footnote No. 1) and the slowest economic recovery in modern history.

Revenues have remained below 16% of the economy, compared to 18% to 19% in a normal expansion.

The 2008 crisis is long over. The crisis now is Mr. Obama's non-recovery.

Footnote No. 6: Even at face value, Mr. Obama's suggestion that he is "only" responsible for 10% of what the government does is ludicrous. Note that in addition to his "stimulus," what he calls "emergency actions" include his new health-care entitlement that will cost taxpayers $200 billion per year when fully implemented and grow annually at 8%, even using low-ball assumptions.

But the larger point concerns executive leadership.

Every President "inherits" a government that was built over generations, which he chooses to change, or not to change, to suit his priorities. Mr. Obama chose to see the government he inherited and grow it faster than any President since LBJ.

The pre-eminent political question now is whether to reform the government we have to make it affordable going forward, or to keep growing the government and raise taxes to finance it, if that is even possible. Mr. Obama favors the second option, though he pretends he can merely tax the rich to do it.

Nobody who has looked honestly at the numbers believes that - not his own Simpson-Bowles commission and not the Congressional "super committee" he sanctioned but then worked to undermine.

At every turn he has demagogued the Romney-Ryan proposals to modernize the entitlement state so it is "affordable," and he personally blew up the "grand bargain" House Speaker John Boehner was willing to strike last summer.

Footnote No. 7: Mr. Obama's posture as the tightest skinflint since Eisenhower is a tutorial in how to dissemble with statistics. The growth rate seems low because he's measuring from the end of fiscal 2009, after a one-year spending increase of $535 billion.

(That is the year of his stimulus and thus spending is growing off a much higher base.)

The real annual pace of government growth is closer to 5% - and that doesn't count ObamaCare[!]

In another news-making bit with "60 Minutes" (which the program decided not to air) Mr. Obama conceded that... 

"Do we see sometimes us going overboard in our campaign, mistakes that are made, areas where there's no doubt that somebody could dispute how we are presenting things? That happens in politics."

Note the passive voice, as if the President's re-election campaign is disembodied from the President.

If Mr. Obama's campaign seems dishonest enough that even Mr. Obama is forced to admit it, this is because it's coming from the top.