Saturday, October 24, 2015

Arguing with Liberals

The following is my response to an American Liberal who insists that Obama ia great economic president, that the stimulus package was not a key contributor to the debt and that Obama should only really be responsible for debt growth consistent with legislaion that he alone introduced.He also thre in 911 for good measures plus the dreaded tax cuts that Liberals love to go on about.

To Jeff

From what it looks like you are attempting to defend Obama by saying that he should only be responsible for added debt that occurred as a result of specific legislation that he introduced. This of course bypasses the full picture. In fact if that were the case then one could argue that the entire Housing Crisis and the subsequent crash rests at the feet of Bill Clinton. Clearly this makes no sense as the executive must take responsibility for all debt levels that grow under their watch. To quote Harry Truman (my all-time favourite President believe it or not) ‘the Buck stops here’.

I had to chuckle at the way you said that ARRA was ‘only’ 800 billion. In actuality an extra 100 billion was added later to this number for a total spending that is greater than the GDP of all but 15 of the 195 nations on this planet. This drove spending levels through the roof. In fact in raw terms this stimulus package accounted for one out of every seven dollars spent that year and was more or less equivalent to the total spending of the much parodied Reagan budget of 1985. Don’t forget that to spend 800 billion greenbacks the US was forced to borrow heavily and this in turn added to debt repayment demands which ultimately impact any future budget. Therefore viewing the ARRA as a once in a life deal is short sighted especially when stimulus money impact recurring initiatives.

The ACA did not contribute to debt in 2009 but it has certainly added to spending ever since its rollout (failed websites and all). In fact the Urban Institute and Brookings (hardly right wing organizations) expect spending to increase by a full 1.1 trillion between now and 2020 if current trends hold. The ACA will no doubt impact this.

The tax cut argument had some merit circa 2001-2003 when tax revenues dropped below the two trillion mark but by 2005 they were up to levels that far exceeded the Clinton years (2.5 trillion versus 2.0 trillion under Clinton). However the tax cut argument simply carries no weight in the long run and if anything it helped accelerate a more rapid recovery from the 2001 recession than did the far more intrusive and wasteful ARRA whose efficacy may have even delayed the 2008-2009 ‘mini-depression recovery’.

911 and the Iraq war did increase spending and I will not deny this but that is a debate for another time. Should the US have acted as they did? Perhaps yes? Perhaps not? Would Al Gore have acted differently? Who can tell? Obama has had his fair share of foreign exploits as well. Libya comes to mind as have some of the limited and ineffective forays into Syria.

As mentioned in an earlier post spending still remained high between 2010 and 2014 (long after 911 and Iraq were dominant items). Also one cannot dismiss increased welfare spending. It eats up a considerable amount of tax revenue and has grown considerably in the Obama years as U6 unemployment has soared.

Nevertheless thanks for the rebuttal. I appreciate a good counter-argument. Quick question - Any thoughts on Solyandra and Cash-for-Clunkers?
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