Hat Tip to Powerlineblog.com.
That Was Then, This Is Now
It's no secret that there is no intellectual integrity on the Left, but it's still hard not to be a bit shocked by liberals' reaction to the budget proposal that Barack Obama unleashed yesterday. Let's take the example of the New York Times, probably the most prominent voice of the Far Left in the U.S. Throughout the George W. Bush administration, the Times' editorial board waxed eloquent about the terrible consequences to be expected from the Bush deficits. Let's cite just a few examples.
It is incredible to see a wartime president demanding a tax cut that would, in an instant, require a record $984 billion increase in the national debt, to $7.384 trillion, with annual deficits of $400 billion and more under a Republican Party that once bragged of budgetary rectitude.
Obama's budget contemplates a $1.75 trillion deficit in its first year, and does not even aspire to a deficit as small as $400 billion at any time in the future.
[T]he detaxation mania continues apace as House and Senate leaders press toward a Memorial Day deadline that will be a rendezvous with foolhardiness. By then, they hope to enact a Bush tax cut and spending plan adding $2.7 trillion in deficits to a coming decade of red ink....
Barack Obama's budget added a $1.7 trillion deficit in his first year in office.
This version of the president's ''growth'' plan will increase the deficit by hundreds of billions of dollars across the next decade. [Ed.: Those were the good old days.] To help pay for it, the G.O.P. budget hawks of yore, born again now as deficit spenders of record proportions, will soon have to raise the national debt limit by almost a trillion dollars from the current $6.4 trillion. ... ''Deficits do matter,'' the Federal Reserve chairman, Alan Greenspan, warned Congress, sounding like a Dickensian wraith ominously foreseeing a future of red-ink borrowing and rising interest rates. But the Republicans appear set to party on now and roll the tab over the far horizon.
So, do deficits "still matter?" And if so, with their grotesquely multiplied deficits, are today's Democrats "partying on now and rolling the tab over the far horizon?"
The White House serenely brushed off a detailed caution from the Congressional Budget Office last week that the growth in the deficit is more likely to roar than retreat across the next decade, fed by the three Bush tax cuts and other debt-fattening indulgences. If that warning was not enough, how about the concern reported at the International Monetary Fund that the administration has no credible plan to restore budget balance? Yes, the I.M.F., which must lecture the profligates of the globe, is worried that a structural deficit will push up interest rates and restrain growth as America ceaselessly borrows to steer red ink from imbalanced budgets onto future taxpayers.
Now that his planned deficits are four times larger, does Obama's budget contain "debt-fattening indulgences?" Has the Times denounced them? Does the Obama administration have a "credible plan to restore budget balance?" Given that Obama's intended budgets--put aside how optimistic his numbers may be--far exceed the actual deficits during the Bush administration, is the Times still "worried that a structural deficit will push up interest rates and restrain growth as America ceaselessly borrows to steer red ink from imbalanced budgets onto future taxpayers?" If not, why not?
The Wall Street investment bank Goldman Sachs, not given to hyperbole, warned in its most recent newsletter that the ''U.S. budget is out of control.'' This sentiment was echoed by the bipartisan Concord Coalition, which monitors federal spending, and which called 2003 ''the most irresponsible year ever'' in terms of fiscal discipline. ...
these Republicans have presided over an orgy of tax cuts and benefit increases that, according to the Concord group, will not only boost this year's projected deficit but also add as much as $800 billion to the national debt over the next 10 years.
Barack Obama has added more than twice that much to the national debt in his first 30 days in office. May 23, 2004:
A few weeks before the fall election, President Bush is likely to claim a victory, of sorts, over the budget deficit. The good news will be based on October data from the Office of Management and Budget in the executive branch, which, according to widespread estimates, will show red ink of $420 billion to $450 billion at the end of the 2004 fiscal year. When the year started, the budget office had conveniently projected a deficit of $521 billion. Hence, a bookkeeping triumph.
The deficits they're talking about here are around one quarter of what Obama projects for his first year in office.
The administration would like to turn the budget deficit into a non-issue in the presidential campaign. But it deserves to be one of the central talking points, even more than it was in 1992, when Ross Perot rightly convinced the nation that deficits were threatening American prosperity. ...
Though the Bush deficit of 2003 was already a record in pure numbers, the administration's defenders often point out that it amounted to only 3.5 percent of gross domestic product. That doesn't sound too bad compared with the modern record of 6 percent set by President Ronald Reagan in 1983. But the size of the deficit now is masked by the Social Security Trust Fund surplus. If you believe that the Social Security surplus would be put to better use by being preserved for future retirees, the Bush deficit should really amount to 5 percent of G.D.P.
Obama's first deficit will amount to more than 12 percent of G.D.P.
President Reagan's deficit binge occurred decades before the baby boomers' retirement. This one is taking place on the eve. To use an analogy, President Bush's deficits are putting the nation in the position of a couple who take out a long-term mortgage just before retirement.
That's a travesty, because reducing the buildup of government debt is the key to strengthening Social Security. ... Clearly, we could not have picked a worse demographic moment to be borrowing money on the next generation's credit.
We're still waiting for the Times to point out that the Democrats' vastly greater deficits are so ill-timed as to constitute a "travesty." More fundamentally, is reducing federal debt the "key to strengthening Social Security?" If so, has the Obama administration threatened the viability of Social Security by exploding federal debt? If not, why not?
A greater reliance on foreign creditors creates further economic instability, as nations like Argentina have found out the hard way. Debt is debt, to be sure, leading ultimately to a smaller economy than would otherwise be the case.
But debt owed to foreigners is more likely to affect the value of the dollar, and foreign capital is more nomadic, leaving the United States vulnerable to the whims of central bankers in Beijing and Tokyo.
But even if a sudden catastrophe never materializes, a slower one is already in the making. It is important that voters talk seriously about deficits in this political season.
I agree with that last observation. Now that the deficits are four times greater than the ones the Times was so worried about, do the paper's editorialists hold to the same view? Do they still think that debt--far greater debt--will "[lead] ultimately to a smaller economy than would otherwise be the case?" If not, what's changed in such a short time?
From the grim evidence of his deficit-stoking tax cuts, Mr. Bush hardly loses sleep over unbalanced books. Yet now comes his rare veto threat, a nod to the voters' growing anxiety over the crushing national debt.
Are the voters still anxious over the "crushing national debt," now slated to burgeon far beyond what it was during the Bush administration? Should they be anxious over the "crushing national debt?" In this editorial, the Times ridiculed President Bush because he proposed to veto such small spending bills. Should Barack Obama veto much more spending than Bush did?
Central to low interest rates -- particularly long-term rates -- is keeping down federal borrowing. All the debt that Washington incurs to finance our federal budget deficit pushes interest rates higher than they otherwise would be. ...
When adjusted for the minimal inflation of recent years, interest rates have not been as low as they were during some other periods of slow growth. And although they were low, they would have been lower still with less borrowing. It's basic economics: When we want more of something, the price goes up. To deny that is to believe that the market for borrowing money is somehow different from all other markets.
I think that's true, too. Does the Times still believe what it wrote in 2004, now that federal borrowing has exploded in a Democratic administration?
[T]he president has yet to veto his first bill or to publicly pressure or scold his fellow Republicans on Capitol Hill for their lack of fiscal restraint. By contrast, conservative policy organizations have been pummeling the Bush administration for what the Heritage Foundation calls ''a spending spree.'' Congress has been larding up legislation with local projects -- for trails, visitors centers, marina repairs and planning grants by the dozen.
So, how does the Times feel about the salt marsh harvest mouse?
Some who are relaxed about the deficit say that we will ''grow into it,'' that a faster rate of growth will lead to more tax receipts and close the gap, thereby taking pressure off interest rates. But assuming current policies are continued, the government will need to borrow $5 trillion more over the next 10 years. Even one percentage point more in economic growth than is now expected -- a hugely ambitious goal -- would cut the $5 trillion only in half.
Under Obama's budget, the government will have to borrow a lot more than that. Is it still a problem?
There are many reasons that we need to find a national consensus to reduce the budget deficit -- bankrupting Medicare and Social Security, burdening our children with debt and the like -- but now that we have entered a period of rising interest rates, a higher cost of borrowing for both business and consumers is perhaps the most immediate.
Now that the deficit is growing so much faster under a Democratic administration whose election the Times enthusiastically supported, are we still in danger of bankrupting Medicare and Social Security, and is the Times still worried about "burdening our children" with far greater debt than was contemplated when this editorial was written?
The answers to all of the questions we've posed are unclear. The Times editorialists have addressed the question of Obama's deficits--sort of--only once, here. The editorialists' main theme is glee that the Obama administration plans to raise taxes. But what about the horrors of deficit spending, that were so ubiquitous during the Bush administration? The Times can respond only with dishonesty:
Mr. Obama's blueprint, released on Thursday, commits to cutting by more than two-thirds, by 2013, the $1.75 trillion budget deficit that Mr. Bush dumped on the nation.
In fact, the $1.75 trillion, by Obama's own account, is his budget, not President Bush's: on no scenario did Bush "dump" anything like that deficit on the nation. What Obama has done, as he has acknowledged, is to increase the deficit he was bequeathed, not decrease it. So it is absurd for the Times to retrospectively blame Bush for Obama's policy choices.
Further, even if Obama succeeded in reducing the federal deficit by two-thirds from the astonishing, unprecedented $1.75 trillion figure that he intends to ring up in his first fiscal year, his deficits would still exceed those that he "inherited" from President Bush. But the Times has no integrity, and it assumes that those who read its editorials--a pathetically small, but no doubt loyal, number--won't notice how its tune has changed. So it offers this absurdity:
The Obama administration has acknowledged the need for deficit spending to stimulate the economy but has vowed that unpaid-for government will not become the norm. Judging from the blueprint, Mr. Obama is not just talking the talk.
The Times editors apparently haven't tried to do the math. Here is a chart of federal spending and revenues through 2019--three years after Obama leaves office, assuming a second term--under Obama's rosy budget projections; click to enlarge:
"Unpaid-for government," to a greater extent than that which the Times denounced during George Bush's administration, is, in fact, "the norm" as far as the eye can see. But that's what you expect from the Times: either deliberate falsehood or impenetrable ignorance; it's often hard to tell which. The Times' editors are in the bag for the Left, and there is little pretense of consistency or intellectual integrity; in fact, the editors are not very bright--to be a Times editor is to be a full-time shill.
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