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April 20, 2009


I agree that it's hypocritical for Rove to criticise certain behavior by the other party when he had approved of the same behavior by his own party. However, I disagree with the adjective "bizarre". This is how politicians normally behave. And, I'd rather see one-sided criticism than none when an elected official misbehaves.

A disturbing aspect of Chait's post is that he seems to be using the charge of hypocrisy to avoid dealing with the substance of Rove's assertions. If we all followed Chait's implicit approach a President would seldom be criticized. His own party would seldom if ever criticize him. The other party would be barred from criticizing him because some of their past Presidents may have behaved similarly.

BTW although Bush and Obama both had deficits difference in magnitude. is staggering, (scroll down a bit to see the chart)

BTW although Bush and Obama both had deficits difference in magnitude. is staggering

I don't see how you can possibly compare the magnitude of Bush's deficits to Obama's, nevermind conclude that the differences are staggering. Bush's deficits are history (not including the projected deficits of the continuation of his policies), while Obama has been in office a grand total of 3 months and his "deficits" are entirely hypothetical at this point.

Nobody projecting the deficits of George Bush this early in his presidency would have gotten close to the correct figure (I notice that even the chart you linked to somehow missed the first half of Bush's TARP bailout and faults the rest to Obama). Likewise, no one would have projected the budget surpluses at the end of Clinton's term. (Or the deficits under Bush I, Reagan, Carter, etc).

Yes, the actual deficits could be better than these projections. Or, they could be worse. Here are four reasons why I personally expect them to be worse:

1. Budget projections have more often than not been optimistic.

2. The economy is running worse than the assumptions in both the Obama and CBO projections. That's an early sign that the so-called stimulus bill isn't working. Both sets of projections assume a fairly rapid economic recovery. If the recession continues or even worsens, the actual deficits will be larger.

3. Government-paid health care for all is likely to be passed.

I once had a discussioh with Robery J. Myers, the original chief actuary of Social Security. He was still chief actuary when Medicare began. He explained that the actuarial projections for Medicare had been wildly wrong. Actual costs had been some multiple of estimated. The key had been that usage far exceeded what had been expected.

Based on that experience, I would expect the expansion in medical care to add substantially to future years' deficits.

4. Another possibility, too horrible to contemplate, would be the failure of some of the bailed-out financial entities. Today TARP money loaned to these entities isn't shown as a cost on the budget, because the money is expected to be paid back. But, failure of the entity would require the loan to be booked as a cost. Since the government has has provided loans of, I think, over $1 trillion, some part of that amount might add to the deficit in the next few years.


1.) I disagree. Budget projections have been optimistic compared to bad times and pessimistic compared to good times. The projections also assume that there is no new legislation to cover future deficits (this is the major reason these predictions have been wrong in the past).

2.) Again, we're only 3 months into Obama's term. It's impossible to say whether the long term economy is running better or worse than predicted.

3.) Government health care, if passed, could easily have a full funding mechanism (like Social Security has) and needn't contribute to the deficit at all.

4.) So would that count against Bush in your calculus or Obama? Your original comment suggests you'd put it on Obama, despite the TARP being Bush's policy.

Yes, I would give Bush major blame for TARP. I blame him for bailing out AIG, which IMHO was illegal as well as unwise. I blame Bush for using TARP money on automobile companies, another likely illegal move, since they were not specified in the TARP legislation.

Obama inherited a deficit crisis from Bush and a pattern of over-interference with the free market. I wish Obama and the Congress would work to reverse these tendencies.

Re health care: I think it's more likely that government health care will have a full funding mechanism like Medicare, which it will closely resemble. The Medicare assessment rates turned out to be far too low to cover the costs of the program, so a large and growing part of the budget goes to the Medicare shortfall.

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