Stanford Economist Slams Obama Budget

[RetiredGySgt]

I'm not that much of an Obama worshipper -- I supported Clinton.

But I do get a bit jaded to see an author who was the Chair of Bush's Econ Council ranking on Obama about projected deficits during a time of the worst recession since wWII.

Where was Mr. Boskin squawking about deficits while the Govt he advised and was part of ran up $1/2 trillion deficits year after year after year? And at a time when the economy was doing fine?

I'm happy to see that people are finally focusing on deficits now that the Govt is $11 trillion in debt.

However, Mr. Boskin's -- and conservatives like him -- objections about the deficit would have a lot more persuasive authority if they didn't carry the stink of hypocricy with them.

He worked with HW not GW - c'mon people - know your damn presidents!

HW was the one who raised taxes...

Yeah, once he realized he had to try to get Reagan's spending spree under control, Bush 41 had to renege on his famous "read my lips" pledge. Poor guy paid for Ronnie's follies by losing reelection.

Might want to review your facts. Reagan never went on a spending spree. Check it out, NONE of his Budgets were ever approved, the Democrats that controlled Congress INCREASED them.

In fact leaders of the Democrats in Congress STATED for the Record that IF Reagan insisted on an increase in Military spending they would see to it that twice what he got for an increase would be put into social programs. And that is what they did.

 

[RetiredGySgt]

Yeah, once he realized he had to try to get Reagan's spending spree under control, Bush 41 had to renege on his famous "read my lips" pledge. Poor guy paid for Ronnie's follies by losing reelection.

Let's be real here maggie...Bush 41 lost the election because of Ross Perot...I know, I know, that's just one of those pesky little facts that you would rather deny.
What do you have to say about Carter? Just to get off topic here, but I would like to read just how good of a president he was....waaaay better than Bush 43 huih?

I agree that Perot was the spoiler. I also agree that Carter made some huge blunders as his administration tried to get the economy back on track, but I also think Carter has been given a bad rap about a lot of things, in particular the attempt to free the Iranian hostages. Just because the military operation got fucked up, Carter was basically horsewhipped by the press for it. But lo and behold, there happened to be another "deal" in the works which enabled Ronald Reagan to announce their release ON THE DAY OF HIS INAUGURATION. I went to high school with Tommy Cullins, who was one of the hostages, and he subsequently had a LOT to say privately about the Iranian "deals" to have them released.

Ya cause well the Iranians would tell the Hostages all about secret deals and be truthful about it.

 

[Iriemon]

He worked with HW not GW - c'mon people - know your damn presidents!

HW was the one who raised taxes...

Yeah, once he realized he had to try to get Reagan's spending spree under control, Bush 41 had to renege on his famous "read my lips" pledge. Poor guy paid for Ronnie's follies by losing reelection.

Might want to review your facts. Reagan never went on a spending spree. Check it out, NONE of his Budgets were ever approved, the Democrats that controlled Congress INCREASED them.

In fact leaders of the Democrats in Congress STATED for the Record that IF Reagan insisted on an increase in Military spending they would see to it that twice what he got for an increase would be put into social programs. And that is what they did.

Defense spending under Reagan more than double (116%), growing much faster than the economy. It wasn't the Democratic Congress that wanted the massive build-up and Star wars, and it compromise with Reagan, since he had the big veto. Reagan compromised to get his spending, and thereby compromised his smaller government objectives -- though spending on non-military discretionary and welfare progams grew much more slowly (30-40%) than the economy during his tenure.

The fact that he sold out on spending didn't alter his politically popular tax cut, though unlike Bush2, Reagan was a pragmatist and recognizing that this programs were causing unprecedented deficits, raised taxes several times. Nonetheless, the US debt grew by 150% during his tenure.

 

[Tech_Esq]

funny how obama worshippers don't actually argue facts, rather ad hominems....

guess that means they cannot dispute the article

That's because that article is one of many which say the same thing. Ironically, there isn't a single pol or economist alive who can accurately predict whether or not the new spending will have long-term success. I'm sure many phases won't, but I'm equally as sure many will.

AND...what EVERYONE seems to forget: This budget isn't set in stone, yet. I believe I heard that the Senate has already removed the carbon tax portion, which should please those on the right as well as the skeptics (like me) who doubt that formula would actually work anyway. The bill goes to conference now, where the real blood will flow. Stay tuned.

And that these are only projections we're talking about which have been historically suspect.

Remember when the CBO was forecasting $2 trillion in surpluses when Bush took office? They were only $7 trillion off on that forecast.

The CBO forgot to factor in that the Tech bubble would burst, that corporate scandals would erupt due to Clinton's failure to regulate causing a collapse of confidence in corporate accounting and markets and 9/11 would happen.

You think MAYBE those actual events have any bearing on what the economy was like?

 

[Iriemon]

That's because that article is one of many which say the same thing. Ironically, there isn't a single pol or economist alive who can accurately predict whether or not the new spending will have long-term success. I'm sure many phases won't, but I'm equally as sure many will.

AND...what EVERYONE seems to forget: This budget isn't set in stone, yet. I believe I heard that the Senate has already removed the carbon tax portion, which should please those on the right as well as the skeptics (like me) who doubt that formula would actually work anyway. The bill goes to conference now, where the real blood will flow. Stay tuned.

And that these are only projections we're talking about which have been historically suspect.

Remember when the CBO was forecasting $2 trillion in surpluses when Bush took office? They were only $7 trillion off on that forecast.

The CBO forgot to factor in that the Tech bubble would burst, that corporate scandals would erupt due to Clinton's failure to regulate causing a collapse of confidence in corporate accounting and markets and 9/11 would happen.

You think MAYBE those actual events have any bearing on what the economy was like?

It's apparent that when forecasting the CBO "forgets" to factor in many unknown, future events. Which is why you take CBO forecasts with a grain of salt.

Thanks for illustrating my point.

 

[Sinatra]

While Reagan did see expansion of the debt - the GDP actually expanded at a far greater pace.

Unlike Obama, Reagan had to face down a very strong effort by Congress to oppose him. He managed to navigate those waters reasonably well - seeing a dramatic alteration in the American tax code, and far greater pressure placed on the Soviet Union.

The Reagan economy in fact extended well into the 1990's with the combined tech boom that resulted in the regulatory hands off approach to the emerging Internet technologies, as well as the considerable peace dividend which allowed tens of billions to then be available to initiate debt paydown.

The critical error of Bush I was to cave into the Democrat demands for a tax increase. The media was pounding that particular recession as being far worse than it actually was and the Bush I administration lost its spine and attempted to work with the Democrat Congress in meeting their desire to increase taxes. This allowed a populist uprisings against Bush I that formed into the Perot movement - the fatal dagger in the Bush re-election hopes. This allowed the relatively unknown Bill Clinton to emerge as the minority victor in that election cycle. By the time Clinton was taking the oath, economists later discoverd that the relatively minor and shallow recession was already over and the economy had been in recovery mode for a number of months prior - but it was too late for Bush I. The great recession of the early 1990's was a fabrication of both the Democrat Congress and the media who used it as a blunt tool to repeatedly whack Bush I over the head with.

Clinton then of course had a disastrous initial two years which resulted in a Democrat backlash and the Republicans taking back of Congress. It was here we now see the resulting dynamics that led to the prosperity of the 1990s. Clinton, fearing re-election losses, veered quickly back into the political middle road - heeding the polling numbers that clearly showed Americans as being slightly right of center in their political positions. We saw a drastic altering of the Welfare State - a move Clinton initially opposed, but polling data demanding he ultimately support - which he did, albeit kicking and screaming the entire way.

So with savings from the peace dividend, welfare reform, the emerging tech boom, low interest rates, and the balanced budget acts, among other factors, America enjoyed a continued extension of Reagan economic prosperity, now conjoined with Clinton's political pragmatism.

This model of leadership began to disintigrate under Bush II. While starting off with relative strength, his tax cuts, combined with terribly unsound increases in federal spending, were a recipe for economic trouble. That is not to say the Bush years were not without economic success - they in fact were. This is more an attribute to the size and strength of the American economy under the navigation of both the Clinton and Reagan administrations though than that of any Bush-specific policies. The Iraq War of course greatly altered the trajectory of the Bush II administration, polarizing the nation to a far greater extent than anything seen for generations, to say nothing of the fiscal costs that put additional strain on an economy that was slowly growing increasingly anemic. Once housing began to falter, for it was housing that had allowed the economy to continue to lurch forward for much of Bush II's tenure, the economic meltdown was inevitable, and came with great speed.

And so now we come to this moment in time. What I have witnessed repeatedly is people responding favorably to Obama, but knowing little as to what they are responding to beyond the superficial likeability of the new President. When questioned on policy, they can point to little if anything that they are supportive of. Just last week when I informed a fervid Obama supporter that it appeared his much promised tax cuts to all but 95% of Americans was already gone, they were quite surprised. "Really?" they said. "I didn't hear anything about that." This individual gets most of their "news" from a bit of MSNBC and the Daily Show/Colbert one-two punch. As such, this individual represents so many Americans who are terribly underinformed and thus, incapable of forming relevent opinions of what is going on all around them.

Obama's spending spree is enormous -and fiscally frightening. I cannot understand how those who complain of the Bush II deficits, can then so easily support the Obama budget. There is no logic to it. The Obama deficits are already outpacing Bush II. What took eight years will only take Obama a handful of months. And if the economic recovery is less than projected, these deficits will be even more frightening to this nation's security - and your children's future.

What Obama needs is the very thing both Clinton and Reagan had that required them to work hard to achieve their respective agendas, and that is tangible political opposition. Obama does not have that - much as Bush II did not have that until the final two years of his own presidency.

I very much hope that 2010 will see a much-needed increase in Republican Congressional opposition, as I truly believe that would be in the best interests of all Americans.

 

[Iriemon]

While Reagan did see expansion of the debt - the GDP actually expanded at a far greater pace.

Revisionist history corrected.

From 1980-1988,

the debt increased 179%
GDP increased 83%.,

Unlike Obama, Reagan had to face down a very strong effort by Congress to oppose him. He managed to navigate those waters reasonably well - seeing a dramatic alteration in the American tax code, and far greater pressure placed on the Soviet Union.

It is true that Reagan did not have a Republican majority. However, he was able to achieve a lot of his legislative objectives (tax cuts, military expansion) thanks to a gaggle of "gypsy moth" Dems who voted with the Republican minority to give them the votes they needed to pass legislation.

The Reagan economy in fact extended well into the 1990's with the combined tech boom that resulted in the regulatory hands off approach to the emerging Internet technologies, as well as the considerable peace dividend which allowed tens of billions to then be available to initiate debt paydown.

The Reagan economy ended with a recession in 1991. In 1993 Clinton and the Dems increased the top tax rate from 31% to 40%, effectively ending "voodoo economics" and the Reagan revolution. Like today, Republicans predicted recession and disaster. What we got was the economy experienced its longest boom post war.

The critical error of Bush I was to cave into the Democrat demands for a tax increase. The media was pounding that particular recession as being far worse than it actually was and the Bush I administration lost its spine and attempted to work with the Democrat Congress in meeting their desire to increase taxes. This allowed a populist uprisings against Bush I that formed into the Perot movement - the fatal dagger in the Bush re-election hopes.

Bush1 inhereted huge and unsustainable deficits from Reagan and, unlike his son, understood he had to take action to correct it.

He passed a very moderate tax increase (from 28% to 31%). Of course, tax increase are the mortal sin of the party to make the rich richer, and many turned on him.

This allowed the relatively unknown Bill Clinton to emerge as the minority victor in that election cycle. By the time Clinton was taking the oath, economists later discoverd that the relatively minor and shallow recession was already over and the economy had been in recovery mode for a number of months prior - but it was too late for Bush I. The great recession of the early 1990's was a fabrication of both the Democrat Congress and the media who used it as a blunt tool to repeatedly whack Bush I over the head with.

The 1991 recession was minor. Real GDP decreased .02% that year. Though if you want to talk about "fabricated" recessions, during the "Clinton recession" of 2001 the real GDP actualy went up .7%

Clinton then of course had a disastrous initial two years which resulted in a Democrat backlash and the Republicans taking back of Congress.

The economy did fine Clinton's first two years. It is true, Clinton and the Dems had the guts to do the right thing and pass an unpopular tax increase. That was the big factor in balancing the budget, but the "pass the buck" generation, egged on by Republicans pandering tax cuts, made them pay in 1994 and the Dems were voted out of control of Congress.

It was here we now see the resulting dynamics that led to the prosperity of the 1990s. Clinton, fearing re-election losses, veered quickly back into the political middle road - heeding the polling numbers that clearly showed Americans as being slightly right of center in their political positions. We saw a drastic altering of the Welfare State - a move Clinton initially opposed, but polling data demanding he ultimately support - which he did, albeit kicking and screaming the entire way.

Clinton resisted Republican demands to slash taxes, even threatening to shut down the Govt over it. He held them off with his veto, and thus stayed the course of decreasing deficits and the first surplus in many decades.

A unique opportunity the Republicans quickly squandered when they got one of their own in the white house.

So with savings from the peace dividend, welfare reform, the emerging tech boom, low interest rates, and the balanced budget acts, among other factors, America enjoyed a continued extension of Reagan economic prosperity, now conjoined with Clinton's political pragmatism.

Imagine that. Tax rates were almost 50% higher that under Reagan, and deficits came down, and the country prospered like it hadn't since the 60s. Ahhh, the good old days!

This model of leadership began to disintigrate under Bush II. While starting off with relative strength, his tax cuts, combined with terribly unsound increases in federal spending, were a recipe for economic trouble.

Hey, you got one right. Tax cuts plus spending increases (largely on the military) brought back records deficits in just a couple years.

That is not to say the Bush years were not without economic success - they in fact were.

Bush's best year was worse than Clinton's 6th best. There's success for you.

This is more an attribute to the size and strength of the American economy under the navigation of both the Clinton and Reagan administrations though than that of any Bush-specific policies. The Iraq War of course greatly altered the trajectory of the Bush II administration, polarizing the nation to a far greater extent than anything seen for generations, to say nothing of the fiscal costs that put additional strain on an economy that was slowly growing increasingly anemic. Once housing began to falter, for it was housing that had allowed the economy to continue to lurch forward for much of Bush II's tenure, the economic meltdown was inevitable, and came with great speed.

No bad!

And so now we come to this moment in time. What I have witnessed repeatedly is people responding favorably to Obama, but knowing little as to what they are responding to beyond the superficial likeability of the new President. When questioned on policy, they can point to little if anything that they are supportive of. Just last week when I informed a fervid Obama supporter that it appeared his much promised tax cuts to all but 95% of Americans was already gone, they were quite surprised. "Really?" they said. "I didn't hear anything about that." This individual gets most of their "news" from a bit of MSNBC and the Daily Show/Colbert one-two punch. As such, this individual represents so many Americans who are terribly underinformed and thus, incapable of forming relevent opinions of what is going on all around them.

Obama's spending spree is enormous -and fiscally frightening. I cannot understand how those who complain of the Bush II deficits, can then so easily support the Obama budget. There is no logic to it. The Obama deficits are already outpacing Bush II. What took eight years will only take Obama a handful of months. And if the economic recovery is less than projected, these deficits will be even more frightening to this nation's security - and your children's future.

What Obama needs is the very thing both Clinton and Reagan had that required them to work hard to achieve their respective agendas, and that is tangible political opposition. Obama does not have that - much as Bush II did not have that until the final two years of his own presidency.

I very much hope that 2010 will see a much-needed increase in Republican Congressional opposition, as I truly believe that would be in the best interests of all Americans.

Obama inhereted an economy that was facing a compelete credit freeze for the first time since the great depression. Unsupervisioned and unregulated mortgage practices left financial instutions that deregulation had allowed to become so gigantic that their fairlure threatened to bring the entire economy down into another great depression.

Faced with this economic disaster, the Obama administration, like Bush's before it, is doing everything it can on the monetary and fiscal side to juice the economy and lending and keep the economy from going over a cliff. If we don't we can thank them for that.

But that won't keep the "loyal opposition" from doing everything in its power to undermine Obama. They know the nation's success means they are out of power, and they know that an Obama administration means an end to the make the rich richer policies that the last administration has so effectively implemented.

If Obama was doing nothing they'd blame him for the depression. Whatever he does they will complain about and say its unnecessary. None of this should surprise anyone.

I'll provide supporting data for any of my factual assertions on request. It comes from the CBO, BEA, and Treasury Dept.

 

[Sinatra]

While Reagan did see expansion of the debt - the GDP actually expanded at a far greater pace.

Unlike Obama, Reagan had to face down a very strong effort by Congress to oppose him. He managed to navigate those waters reasonably well - seeing a dramatic alteration in the American tax code, and far greater pressure placed on the Soviet Union.

The Reagan economy in fact extended well into the 1990's with the combined tech boom that resulted in the regulatory hands off approach to the emerging Internet technologies, as well as the considerable peace dividend which allowed tens of billions to then be available to initiate debt paydown.

The critical error of Bush I was to cave into the Democrat demands for a tax increase. The media was pounding that particular recession as being far worse than it actually was and the Bush I administration lost its spine and attempted to work with the Democrat Congress in meeting their desire to increase taxes. This allowed a populist uprisings against Bush I that formed into the Perot movement - the fatal dagger in the Bush re-election hopes. This allowed the relatively unknown Bill Clinton to emerge as the minority victor in that election cycle. By the time Clinton was taking the oath, economists later discoverd that the relatively minor and shallow recession was already over and the economy had been in recovery mode for a number of months prior - but it was too late for Bush I. The great recession of the early 1990's was a fabrication of both the Democrat Congress and the media who used it as a blunt tool to repeatedly whack Bush I over the head with.

Clinton then of course had a disastrous initial two years which resulted in a Democrat backlash and the Republicans taking back of Congress. It was here we now see the resulting dynamics that led to the prosperity of the 1990s. Clinton, fearing re-election losses, veered quickly back into the political middle road - heeding the polling numbers that clearly showed Americans as being slightly right of center in their political positions. We saw a drastic altering of the Welfare State - a move Clinton initially opposed, but polling data demanding he ultimately support - which he did, albeit kicking and screaming the entire way.

So with savings from the peace dividend, welfare reform, the emerging tech boom, low interest rates, and the balanced budget acts, among other factors, America enjoyed a continued extension of Reagan economic prosperity, now conjoined with Clinton's political pragmatism.

This model of leadership began to disintigrate under Bush II. While starting off with relative strength, his tax cuts, combined with terribly unsound increases in federal spending, were a recipe for economic trouble. That is not to say the Bush years were not without economic success - they in fact were. This is more an attribute to the size and strength of the American economy under the navigation of both the Clinton and Reagan administrations though than that of any Bush-specific policies. The Iraq War of course greatly altered the trajectory of the Bush II administration, polarizing the nation to a far greater extent than anything seen for generations, to say nothing of the fiscal costs that put additional strain on an economy that was slowly growing increasingly anemic. Once housing began to falter, for it was housing that had allowed the economy to continue to lurch forward for much of Bush II's tenure, the economic meltdown was inevitable, and came with great speed.

And so now we come to this moment in time. What I have witnessed repeatedly is people responding favorably to Obama, but knowing little as to what they are responding to beyond the superficial likeability of the new President. When questioned on policy, they can point to little if anything that they are supportive of. Just last week when I informed a fervid Obama supporter that it appeared his much promised tax cuts to all but 95% of Americans was already gone, they were quite surprised. "Really?" they said. "I didn't hear anything about that." This individual gets most of their "news" from a bit of MSNBC and the Daily Show/Colbert one-two punch. As such, this individual represents so many Americans who are terribly underinformed and thus, incapable of forming relevent opinions of what is going on all around them.

Obama's spending spree is enormous -and fiscally frightening. I cannot understand how those who complain of the Bush II deficits, can then so easily support the Obama budget. There is no logic to it. The Obama deficits are already outpacing Bush II. What took eight years will only take Obama a handful of months. And if the economic recovery is less than projected, these deficits will be even more frightening to this nation's security - and your children's future.

What Obama needs is the very thing both Clinton and Reagan had that required them to work hard to achieve their respective agendas, and that is tangible political opposition. Obama does not have that - much as Bush II did not have that until the final two years of his own presidency.

I very much hope that 2010 will see a much-needed increase in Republican Congressional opposition, as I truly believe that would be in the best interests of all Americans.

The national debt under Reagan increased from $900 billion to 2.8 Trillion while GDP increased by over 15 trillion. Every income group prospered under Reagan - not the case post-Reagan.

Much of the increased debt was attributable to the Cold War and eventual defeat of the Soviet Union - this in turn created the peace dividend of the Bush and Clinton years. Reagan went to war with the Soviet Union and won, and the resulting economic benefits of that victory have been substantial, to say nothing of the basic human improvements throughout much of the world.

If the federal government had actually maintained the non-defense cuts in government spending by Reagan, instead of greatly expanding them, the United States fiscal health would be far more sound than it is today. Clinton and the Republican Congress of that era did this to some extent.

What followed under Bush II, and now Obama, is a fiscal abomination the likes this nation has yet to see.

 

[DamnYankee]

The double-speak being generated by this Obama administration is epic in both proportion and its misleading nature.

This economist rips through the budget truths quite effectively:

Michael Boskin Says Barack Obama's Trillion-Dollar Deficit Budget Will Impede Economic Growth - WSJ.com

A fair synopsis I'd say:

"While Mr. Obama's higher tax rates are economically harmful, some of his tax policies deserve wide support, e.g., permanently indexing the alternative minimum tax. Ditto some of the spending increases, including the extension of unemployment benefits, given the severe recession.

"Neither a large deficit in a recession nor a small increase from the current modest level in the debt to GDP ratio is worrisome. And at a 50% debt-to-GDP ratio, with nominal GDP growing 4% (the CBO out-year forecast), deficits of 2% of GDP would not be increasing the debt burden relative to income.

"But what is not just worrisome but dangerous are the growing trillion dollar deficits in the latter years of the Obama budget. These deficits are so large for a prosperous nation in peacetime -- three times safe levels -- that they would cause the debt burden to soar toward banana republic levels. That's a recipe for a permanent drag on growth and serious pressure on the Federal Reserve to inflate, not the new era of rising prosperity that Mr. Obama and his advisers foresee."

 

[editec]

Stanford Economist Slams Obama Budget

What did this Stamfort Economist have to say about the previous budgets?

 

[Sinatra]

Stanford Economist Slams Obama Budget

What did this Stamfort Economist have to say about the previous budgets?

Who cares?

We are dealing with the present.

At present, this administration is setting new records for deficit spending and such spending will likely have considerable and negative impacts on our nation's future.