The CBPP Economic Downturn Chart is Deeply Dishonest

I was reading Jonathan Chait (who is really smart) the other day and I came across The Stigmatization Of Bush-Blaming.

A quick summary of the post: It’s right and proper to blame Bush for all the economic and federal deficit unhappiness because it’s really and for true all his fault. But if liberals continue to do it, it sounds whiny petty. So liberals can’t say the truth because it is politically non-viable.

An compelling thesis to be sure, especially when it is supported with this chart that Chait pulled up.

And so, as I am wont to do (and apparently Chait is not wont), I looked for the origin of that chart and found this page from the CBPP (Center on Budget and Policy Priorities) that explains the chart.

<TANGENT>

I would like to decry the practice that I’m am hereby dubbing “source masturbation”. It is when you link to yourself to support your thesis and bury the actual source 2-3 links deep. For example, writing a blog post where you link to a post you wrote that links to a report you put out and the original source is in the footnotes. Media Matters does this kind of thing constantly and I find myself just doing a Google search of what they’re talking about rather than try to follow the links.

This post from the CBPP is actually worse… they link to the footnotes at the bottom of the page which then link to the footnotes inside the report… the ones you just clicked on to get to the bottom of the page! Do they link at any point to anything outside their own website? No. No they do not.

This is the internet, people. Use it.

<End TANGENT>

Moving along.

The problem with this chart is that it implies that:

  • the economic downturn is Bush’s fault and will continue to be Bush’s fault
  • the tax cuts will extent into 2019 and they will be Bush’s fault
  • the Iraq and Afghanistan wars are Bush’s fault.

Let’s start with the last one first. I don’t want to argue the Iraq and Afghanistan wars because it will run something like this. “You’re stupid and a jerk.” “No, you’re the stupid jerk.” “You want to murder babies.” “No, you want to let other people murder babies.” “Why didn’t you go into the Army, you chickenhawk?” “You don’t know anything about me. My sibling/friend is over there right now.” “I hope your sibling/friend is happy killing babies.” (I actually had someone say that last one to me. Dear anti-war people: you may have some valid points, but a lot of the guys on your side are complete a**holes. A**holes don’t persuade very well.)

See how much helpful ground we covered? Let’s just say for the sake of argument that Iraq and Afghanistan is all Bush’s fault and President Obama would get out of there if he could, but he’s trying to be responsible given the situation he found himself in. OK? So 10% of the deficit is due to the wars. What about the remaining 90%?

In this chart, the big item here is the Bush tax cuts. The problem with this analysis is that these tax cuts expire this year. That means President Obama will have to sign them back into law if they are going to continue to be a major factor in the budget deficit. After this year, if they are still in effect, they will be the Obama tax cuts, not the Bush tax cuts.

Furthermore, by the estimates that President Obama’s economic team have come up with, letting these cuts expire will bring in $700 $850 billion over 10 years. (Thanks to John below for pointing out my discrepancy.) Which is like saying that letting these tax cuts expire will pay for the stimulus last year.  By the CBPP analysis, getting rid of the Bush tax cuts would bring in… wait for it… $4.4 trillion over the next 9 years. Which is like paying for the stimulus 6 times over.

But if you look at President Obama’s budget, you see that they assume (with the typical optimism associated with any given administration’s budget report) that, with the tax cuts having expired, we will have a $900 billion deficit in 2019. By contrast, the CBPP assumes that, if we let the tax cuts expire, we would have a deficit of $630 billion.

So, putting aside the tax cuts issue, let’s address the economic downturn issue. CBPP assumes that the downturn is Bush’s fault (naturally) and that President Obama can’t do anything about it. They basically say that the “lingering effects” of the downturn (like interest on the debt we accumulated during that period) should also be blamed on Bush.

This strikes me as uncompelling. This is basically a blame shift game that isn’t appropriate for adults. Imagine if a conservative think-tank created a chart in 2008 which we could see how much of the deficit was due to Medicare/Medicaid/Social Security/Other welfare programs. Or what if we assumed that, if Jimmy Carter had never been president, we would have avoided double digit inflation and the following recession and we extrapolated out those benefits to today?

First, those issues are counter-factual. We can’t know the present based on a theoretical past. (This is the first thing that Chait should have noticed. He’s an editor, not an economist, but he should have seen this very plain logical fallacy for what it is.) The President doesn’t get to pretend that he is dealing with part of the fiscal mess and ignore the rest of it because it’s “not his fault”. The President deals with the reality placed before him. Anything less is juvenile posturing.

Imagine that someone inherits a house. The house is seriously messed up due to the poor management of the previous owner. Cracked walls, rotting floorboards, leaky roof. The new owner comes in and promises to fix it up. It is probably unfair to complain a year later that everything isn’t perfect. But it is childish for the owner to ignore the problems by saying “That was there when I got here.”

Everyone knows there were problems. But by inheriting the house, the problems belong to the owner. The CBPP report is a way of posing a counter-factual scenario and saying “These problems don’t belong to President Obama.” I find the whole process absurd.

But the most egregious error (in my view) is the chart. It seems clear to me that the CBPP would rather build a chart to rest the blame as squarely as possible on Bush’s shoulders instead of building a chart that will increase understanding of the issue. They’ve sadly suckered Chait into this nonsense with a chart that tells him something that he might really like to be true, but that doesn’t very closely tack to fiscal reality.

11 comments

  1. Christopher says:

    There are a few other problems I see with the graph:

    1) There are a few things missing. They picked a few programs to make up the deficit and made the rest of the budget disappear. So not only are the recovery bills (which I and many others would claim had practically nothing to do with recovery) Bush’s fault, Obamacare, continued spending on, say, the Department of Agriculture, and all the entitlement programs have no effect on the deficit at all.

    2) It assumes that a) Bush bears full responsibility for the downturn (fine) and b) the downturn will continue costing 300 billion a year in federal revenue for the next 10 years (which is also Bush’s fault). If we’re going to state that, then we need to be fair and consider the huge amount of revenue Bush managed to come up with by magically stopping the dot-com crash of 2000-2002 from lasting his whole presidency like the housing crash of 2009 is somehow predestined to last all of Obama’s.

  2. John says:

    “Furthermore, by the estimates that President Obama’s economic team have come up with, letting these cuts expire will bring in $700 billion over 10 years.”

    You’re lying. Letting Bush’s tax cuts expire on the upper income bracket alone would bring in over $700 billion.

  3. politicalmath says:

    John,

    I updated the number to “$850 billion over 10 years”. Thanks for pointing out my discrepancy. Although it would have been even more helpful if you had provided a link. Might want to try that out next time.

  4. John says:

    You missed the point.

    The CBPP analysis accounts for all of the Bush era tax cuts, not just the income tax cuts for people who make over $250,000. So you’re wrong to you suggest that the “850 billion” estimate contradicts CBPP’s analysis. Both estimates could be accurate.

  5. politicalmath says:

    John,

    So you’re saying that a tax cut that cost $1.7 trillion over the last decade will cost more than twice that amount in the next decade? How do you figure?

    And even so, the point remains. The ball is strictly in President Obama’s (and the Democrats) court. If they let ALL the tax cuts expire, that will be their doing. If they keep ALL the tax cuts, that will also be their doing. And if they maintain tax cuts for for those who make less than $250,000 and increases taxes on those who make more than $250,000, that, too, will be their doing.

    They will no longer be the Bush tax cuts. They will be the Obama/Democratic tax cuts. The fact that Bush started them doesn’t change the fact that President Obama and the most powerful Democratic congress in 50 years will continue (or discontinue) them. Therefore, the CBPP analysis is blaming Bush for something that Obama is doing.

    Point. Set. Match.

    Also, here’s where I got the $700 billion figure. Thank you for providing me with links to back up your position.

  6. Reality says:

    So you’re saying that a tax cut that cost $1.7 trillion over the last decade will cost more than twice that amount in the next decade? How do you figure?

    Interest. Those tax cuts (and all the other Bush deficit spending) had to be paid for with borrowing. That interest is still being collected.

    the economic downturn is Bush’s fault and will continue to be Bush’s fault

    I wouldn’t put all the blame on his shoulders, but it certainly makes less sense to blame Obama or to claim that Obama didn’t inherit this mess.

    the Iraq and Afghanistan wars are Bush’s fault.

    The former is absolutely his fucking fault. All of it. It was his war of choice which he screwed up and which has cost this nation hundreds of billions, if not trillions, of dollars. Totally 100% his doing, his cost, his fault.

    The latter was not his fault, but the mismanagement of it (owing in large part to his neglecting of the situation due to his focus on Iraq) is his fault. Almost a decade later and we are still pouring more troops and money into that pile of rocks, when we had supposedly won a victory long ago. Had Bush done his job and stayed the course there then maybe the situation wouldn’t be so bad today.

  7. politicalmath says:

    Reality,

    On the interest issue, I don’t think you did do the math on that. If we assume an interest rate of 3.3% (the 10 year yield rate), we’re looking at an additional $740 billion, not double.

    I don’t really see why we should do that. After all, we don’t calculate any other gov’t costs that way. I don’t say “The stimulus really costs $1.1 billion over 10 years” or “The 2009 deficit was really $2.2 trillion over 10 years”. Both those statements would be true if we calculated out the cost over 10 years of 3.3% interest payments. To apply this special calculation to this and only this government debt contribution is a numerical trick to shift blame.

  8. Reality says:

    To apply this special calculation to this and only this government debt contribution is a numerical trick to shift blame.

    True, but it doesn’t make it incorrect. If we still are paying for something, and the payments for that something affect the national debt and deficit, then it isn’t wrong to call out the true cost, especially when you were saddled with these costs . Go ahead and call the stimulus 1.1 trillion. You could almost pay for it with the 740 billion saved in interest without the tax cuts.

  9. politicalmath says:

    Reality,

    It seems that you’re willing to completely discard established standards of tracking government spending… as long as that nasty old George W. Bush looks bad (or, I suppose, worse). No one uses the “once cost and future interest” paradigm that they’re using here.

    Part of the reason if because, if we did, then the long term cost of every dollar we spend would be infinite, forever accumulating interest until we paid off the entire debt. This is clearly an absurd way of calculating the cost of any particular project… which is why we don’t do it that way.

    Also, 740 billion is not “almost” 1.1 trillion. Your willingness to blow off $400 billion in an effort to take a swing at a political punching bag seems to indicate an unseriousness on the topic.

  10. Freewill says:

    Mr. Math,

    I too have noticed a certain tendency of the CBPP to distort and twist the data to not only fit a more, shall we say, “liberal” agenda, but they go out of their way to find some way to lay all the blame on the past administration. I’m glad to see that there are others that see through this nonsense. I blog alot on Newsvine, and many there feel that CBPP analysis is gospel. I have fun picking them apart with actual facts and math like you do. Keep up the good work my friend. Careful though, you might explode Reality’s head if you make him think too much!

    By the way Reality, perhaps you should embrace a bit more of your namesake. Only Congress can declare war, and they declared it in a BIG way against Iraq (296-133 in the House and 77-23 in the Senate). Many of the politicians who now rail against Bush for the war not only voted for it, but spoke out forcefully in favor of it. Don’t make me bust out the videos.

  11. nephyo says:

    “The problem with this chart is that it implies that:
    * the economic downturn is Bush’s fault and will continue to be Bush’s fault
    * the tax cuts will extent into 2019 and they will be Bush’s fault
    * the Iraq and Afghanistan wars are Bush’s fault.”

    Funny… I don’t see those words anywhere on that chart. I think you are reading way too much into it. The chart only shows the sources of the deficit. It doesn’t say whose fault it is.

    People might use it that way, and we can argue about whether using it that way is honest or dishonest, but that’s not a criticism of the data. Either the data represented in the chart is true or it’s not.

    “Furthermore, by the estimates that President Obama’s economic team have come up with, letting these cuts expire will bring in $700 $850 billion over 10 years. (Thanks to John below for pointing out my discrepancy.) Which is like saying that letting these tax cuts expire will pay for the stimulus last year. By the CBPP analysis, getting rid of the Bush tax cuts would bring in… wait for it… $4.4 trillion over the next 9 years. ”

    The difference lies in that the CBPP is assuming ALL the Tax Cuts expire. The Obama team’s analysis uses their preferred outcome that just the tax cuts on the richest 2% expire and the rest remain. That’s the $850 billion.

    But so far Congress hasn’t extended any of the tax cuts. So if they don’t act the CBPP will be proven correct and we’ll save a massive amount on the deficit.

    Whether or not that will turn out to be a good thing as far as the rest of the economy goes is an open question.

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