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History of the Deficit

2009-06-15 15:33:43.677371+00 by Dan Lyke 9 comments

New York Times: America’s Sea of Red Ink Was Years in the Making :

Alan Auerbach, an economist at the University of California, Berkeley, and an author of a widely cited study on the dangers of the current deficits, describes the situation like so: “Bush behaved incredibly irresponsibly for eight years. On the one hand, it might seem unfair for people to blame Obama for not fixing it. On the other hand, he’s not fixing it.”

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comments in ascending chronological order (reverse):

#Comment Re: made: 2009-06-15 23:05:51.626629+00 by: m

Obama is not likely to significantly reduce the deficit. But one of the interesting statistics is that about 80% of the total deficit comes from the administrations lead by Reagan, Bush41 and Bush43.

#Comment Re: made: 2009-06-15 23:53:40.438456+00 by: TheSHAD0W

That's basically the difference between neocons and real conservatives. Conservatives don't spend, neocons borrow and spend. (Socialists tax and spend.) Of the three, neocons are the most harmful, though I have little love for Socialists either.

#Comment Re: made: 2009-06-16 10:32:06.390931+00 by: jeff

How would Bill Clinton be characterized with respect to the deficit?

#Comment Re: made: 2009-06-16 13:39:03.255798+00 by: TheSHAD0W

He sure didn't reduce it, but he did jack up taxes.

#Comment Re: made: 2009-06-16 14:26:31.900368+00 by: jeff [edit history]

Some interesting statistics (which need to be corraborated) here.

Only 5 of the past 40 budgets have been surpluses. All 5 were by Democratic presidents. The twenty years of budgets prepared by Republican presidents increased the national debt by $3,800,000,000,000. The average yearly deficit under Republican budgets was $190 billion. The twenty years of budgets prepared by Democratic presidents increased the national debt by $719,500,000,000. The average yearly deficit under Democratic budgets was $36 billion.

The Clinton administration ran deficits in each of its first four years and surpluses in each of the last four years. The largest deficit was $213 billion in FY1994 and the largest surplus was $219 billion in FY2000. The Clinton years paid down a net $14.2 billion of national debt and averaged a surplus of $1.78 billion.

These numbers will obviously be skewed upward by Bush43 and Obama.

#Comment Re: made: 2009-06-16 15:12:28.965803+00 by: jeff

As a related aside, what does Alan Auerbach have to say about the current California state budget deficit? (California is the 8th largest economy in the world)

What is Auerbach's historical viewpoint on the California budget and his recommendations for the future welfare and well-being of the state?

#Comment Re: State budget deficits as a function of GDP made: 2009-06-16 16:23:58.823064+00 by: jeff

California's current estimated $24B budget shortfall may seem like a lot, but it's only about only a little over 1.3% of GDP (assuming a GDP of $1.8T for the state).

I wonder how that budget deficit percentage compares with other states? CA may not be as bad off as some folks think. States fund their deficits in different ways than the Federal government, though. Are bailouts heading to the states?

#Comment Re: made: 2009-06-16 16:40:52.30569+00 by: Mark A. Hershberger

Mr. Krugman offers this counter-point to Mr. Auerbach's "not fixing it" quote:

To sum up: A few months ago the U.S. economy was in danger of falling into depression. Aggressive monetary policy and deficit spending have, for the time being, averted that danger. And suddenly critics are demanding that we call the whole thing off, and revert to business as usual.

I have no idea who is right.

#Comment Re: made: 2009-06-16 23:00:31.218762+00 by: Dan Lyke

I'm betting that Krugman is wrong, we'll see how that turns out for me.

On the other hand, I'm also betting that Krugman will have enough caveats and "they didn't do exactly what I said" ways to weasel out of being called on his wrongness that he'll never admit to being wrong.