Archive for July 15th, 2010

July 15, 2010

Continuing the Never ending Discussion

by Vince

Jonathan Chait continues on with the discussion over accusations made by Barack Obama towards George W. Bush and the past decades fiscal issues:

The best way to compare deficits over time is as a share of the economy.  This first graph shows budget deficits during President Bush’s tenure.  On this graph deficits are positive, so up is bad.  The dotted green line shows the average deficit since 1970 for comparison (2.6% of GDP).

This graph does not show “a decade of spiraling deficits.”  It instead shows eight years of deficits averaging 2.0 percent of GDP, followed by a horrible ninth year as the markets collapsed and the economy plunged into recession.  (Budget wonks who want to understand why I think we should look at nine years for a Presidency rather than eight can read this.)  Even 2008’s bigger deficit than 2007 can be mostly explained by a revenue decline as the economy slipped into recession pre-crash.  Before the crash of late 2008 President Bush’s budget deficits were 0.6 percentage points smaller than the historic average.  Deficits did not “spiral” during the Bush presidency or the decade.  The bumped around the historic average, then spiked up in the last year.

It’s true that it’s not literally accurate for Obama to accuse the Bush administration of presiding over a decade of spiraling deficits. The Bush deficit rose, then fell a bit at the peak of the economic cycle, and then shot upward once again as the economy crashed. Likewise, it would be unfair to describe Kirstie Alley as having her weight spiral upwards, when it fact it has risen asymptotically upward. Hennessey has a point here. A tiny, tiny point, but a point nonetheless.

Where Hennessey goes badly wrong is in his attempt to defend the responsibility of Bush’s fiscal policy. Hennessey argues that deficits under Bush were not that high until the end, when they got catastrophically high, but the high point was he fault of the economic crash rather than Bush’s policies. The problem, of course, is that Bush inherited a very sound fiscal position. At the peak of the Clinton-era economic boom, the budget was running a surplus equal to 2.4% of GDP. At the height of the Bush-era economic cycle — “boom” isn’t really an accurate description — the budget ran a deficit of 1.2% of GDP. Which is to say, Bush’s policy of launching two wars, a series of major tax cuts, an expansion of defense and homeland security spending and a prescription drug benefit without any offsets whatsoever structurally increased the deficit by about 3.6%. (Note that this argument assumes that Bush bears zero blame for the economic crisis that concluded his presidency.)

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July 15, 2010

Where Blogs Get Their News

by Vince

Pew reports:

Blogs have become an important source for news junkies looking for breaking news and instant analysis, but blogs still look to old media for news stories. In fact, more than 99% of the news stories linked to in blogs come from traditional media sources such as newspapers and broadcast networks. The larger news organizations dominate these links. The BBC (23% of all blog links), CNN (21%), the New York Times (20%) and the Washington Post (16%) combined accounted for fully 80% of all news stories linked to on blogs. Web-only sites, on the other hand, made up less than 1% of the links in the blogosphere.

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