Hunting The Muse

Bush's Budgets: A Graphic Explanation

I've been playing with the figures over at the Congressional Budget Office and I have some more graphics that people should feel free to use to make their points.

First, lets look at the budget over the last few years, how the Social Security surplus has been affecting it, and how much Bush has screwed things up in four short years:

That's quite a drop. Also, notice that Bush has regularly been reporting the deficit figures after Social Security has been figured in, while the real deficit is much lower.

[Note: most presidents do that, but the pro-privatization folks are then saying that when Social Security reaches deficit, that we won't be able to afford to pay it back, that it is a "crisis". When in reality, it's just a debt the government owes to Social Security that they should pay back. Since this "crisis" language is basically admitting that they are taking from a regressive system, giving to a progressive system, and not intending to pay it back, they are basically advocating stealing from the poor and giving to the rich. For a more in-detail explanation of this, see another graphical exploration, Social Security For Dummies. ]

Many people insist that it is more economically pure to look at this graph in terms of GDP, so here is the deficit over the same time range as a percentage of GDP:

So you can see how the GDP growth compresses things as time moves forward. Bush's figures are not quite as bad as his daddy, but the drop-off is still incredibly steep. It's not much of a defense for Bush.

Next up is the budgetary projection. The CBO has released figures for what the budget could look like over the next fifteen years. They react to past performance, assume historical spending growth rates, and other than that assume everything else will remain the same as it is now.

These are the figures that Bush touts as halving the deficit in five years. Note that he's talking about the deficit numbers as affected by the Social Security numbers; not the real deficit. It's mostly the growing Social Security surplus that allows him to make that claim.

Here are the same numbers as a percentage of GDP:

Now, here's the thing. Bush is relying on these numbers as a defense for his policies. But at the same time, Bush is advocating several other policies that will make his projection untrue.

The CBO offers estimates for several of these policies. The first one is Alternative Minimum Tax reform. Bush doesn't exactly advocate this one out loud, but it's widely accepted that this will need reform soon because it is starting to negatively affect middle-class citizens, what that wasn't what it was designed for.

Here is the projection of how AMT reform will affect the deficit. We'll stick to the real deficit for now, the one not adjusted by the Social Security surplus:

Next up are the continuing costs for Iraq and Afghanistan. These are the ones that rely on current assumptions of the cost of both, with neither seeing an escalation that would require even more funding.

Finally, the most dishonest part of Bush's arguments. Bush has already publicly argued in favor of making his tax cuts permanent. It turns out that the CBO's figures all assume that every single tax cut will sunset as originally designed. But Bush is making it a high priority to remove the sunsets and make all the tax cuts permanent, even though he's touting the baseline budget projections as a defense for his policies.

Here is how the permanent tax cuts would affect the deficit:

You can see that what Bush really wants is for is for us to not only increase our debt each year, but to increase it *at a faster rate* each year.

Let's look at this in terms of total debt held by the public. This doesn't include things like the amount of money the government owes to Social Security, it's strictly deficit-caused debt. (I may be somewhat incorrect in this definition, please correct me if so.) We already have a significant national debt. The deficit adds to it every year. Let's look at how Bush's deficits are going to affect our national debt over the next few years.

One note: in order to see it, we have to zoom out.

Way out:

But wait! the economic junkies say. You have to look at it in terms of GDP percentage! And to be fair, look at both its history, and its projections.

First: can we all collectively admit now that Clinton saved our collective hides? Man.

Now, according the graph, the debt in terms of GDP percentage doesn't look.... horrible... compared to historic levels. But - again, these numbers are the CBO baseline projection. I don't have the yearly corrected deficit numbers in terms of GDP, but I do for the public debt. So let's look at it again, with the AMT, Iraq/Afghanistan, and tax cut corrections figured into the public debt as a percentage of GDP:

So there you have it. An ever-increasing debt, even in terms of GDP percentage.

Now, a few notes. These correct projections here that we're looking at still don't include several things:

1) Any Bush "corrections" or supplemental appropriations like the one we just had come up for Iraq and Afghanistan

2) Social Security privatization costs

3) New tax cuts or spending programs

4) New wars

Also, Bush already has a history of making budgetary projections in the past and having them be completely wrong. It's a bit of a incompetence that probably should be figured into this as well.

Now, I have a few questions I have:

1) Does anyone have a source for prior Bush budget projections? I'd love to put together a graph series that says, "In 2001, here is what Bush projected for 2002 and beyond. Here's what actually happened. In 2002, here is what Bush projected for 2003 and beyond. Here is what actually happened..." etc.

2) Debt percentage of GDP isn't actually projected to match where it was during Poppy Bush's reign. Interest rates and other economic indicators were bad back then, but they weren't Argentina-horrible. Given that, is all this talk about major financial market collapses a bit overblown?

Please consider forwarding this around if you think the summary would be helpful for other people to understand.

Posted by Curt at January 28, 2005 04:34 PM