Tuesday, February 2, 2010

Damning With Faint Praise

On the Daily Show, Austin Goolsbee repeats the claim that the administration will start cutting deficits soon and that it is not so bad compared to what Obama inherited from "W" (I paraphrase). Is this really who you want to compare yourself to? "W" holds the title of the US president who inflated the debt the most. But it looks like he will be surpassed in record time.

Bush's last year and Obama's first year included extraordinary measures to "rescue" and "stimulate" the economy. Sensible people disagree about the merits of these measures. But putting that aside, we can compare projections into the "out years" with Bush's non-recession year budget deficits of only around $500 billion. As with all recessions, the current one will eventually end. Previous ones ended within a couple of years. But the White House projects a $727 billion deficit in 2013 and $1,600 billion in 2023. These deficits looks more systemic than temporary stimulus.

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