February 24, 2009

Sizing the Problem Instead of Pretending Eveything's OK


Earlier this week, President Obama took the first steps toward establishing financial responsibility in Washington, banning the use of several accounting gimmicks repeatedly employed by the Bush Administration to conceal the true size of the federal deficit. While the country is already anxious over the size of our budget shortfall, the real picture is worse, because President Bush's White House routinely practiced the following deceits:
  1. Excluding the price of the wars in Iraq and Afghanistan
  2. Not counting Medicare reimbursements to physicians as spending
  3. Omitting expenditures related to disaster response and relief
  4. Failing to adjust revenue projections to account for annual adjustments to the Alternative Minimum Tax (AMT). (Despite the yearly and near-certain authorization of one-time fixes to the AMT, the White House assumed that it would not be addressed, thus overstating revenue.)
The Obama Administration estimates that correcting this off-the-books accounting will result in budgets that are $2.7 trillion deeper in the red over the next decade. As undeniably frightening as those numbers are, however, it is unquestionable that we need to have an accurate picture of country's finances if we are to get our house in order.

Republicans, meanwhile, eager to paint the recently passed economic stimulus package as irresponsible pork barrel spending, are finding themselves outflanked, as Mr. Obama is making no bones about stating that he inherited this now fully-revealed deficit from his predecessor. But are they right? Should we be listening to the GOP on matters of the national purse?

In a word, no, as the graph [h/t Crooks and Liars] below illustrates.


The national debt as a percentage of Gross Domestic Product (GDP) was at its lowest point after the second world war, when Ronald Reagan took office. In the era of Reagan Republicanism that followed (defined to include Presidents Reagan, Bush I and Bush II) - aside from a brief period of financial sanity during the Clinton Administration - the national debt has exploded. If history is any judge, then, modern Republican policies have fully demonstrated themselves to be anything but fiscally responsible. (Many people are unaware that the United States has, in aggregate, fared better economically under Democrats than Republicans since World War II. For more, see Time to Side-Step the Obstructionists and the Misinformed)

Of course, this in no way means that the stimulus bill is perfect, or that our new president can do no wrong. Far from it. However, Mr. Obama is taking what I regard to be the right first steps to put the country back on track after 8 years of wretched and divisive excess. So the next time a Republican shill or politician squawks about the need for fiscal responsibility, think about this graph, and just who got us into the mess we're in today.

4 comments:

lokywoky said...

Great graph. And I think that the point it makes goes back even further historically (I could be wrong!)

Anyway, I agree that Obama may not be doing everything right. But I also believe that he is doing the best he can with what he has to work with (Repub virtual control of the Senate). The Stimulus bill was/is not big enough, but he will be adding spending programs to everything else that he sends up to the Hill in the next month or so. I'm waiting for the howls when he presents the new budget guidelines tomorrow.

In the meantime - we all need to keep debunking the right-wing talking-points (outright lies) they are constantly spewing about what is and isn't in the Stim, the Budget and whatever else.

All the (wrong as usual) hype over the 'financial accountability summit' is another example. Peterson was supposed to be the keynote speaker, in charge of the thing, etc. Turns out he was neither. Although I don't want that idiot anywhere near SS or Medicare, I read an excellent article by someone familiar with the talking process Obama is using for this.

I used to be a community organizer but it's been a while and I had actually forgotten about this group talking process and how it actually forces everyone in the room to actually listen to one another. It is also a long process, designedly so, and after it is over, anything that comes out of the group will be well-thought-out and consensus driven. Idealogues and people like that get left behind during the process and usually abandon it after a short while when people move on. The person who wrote the article knows some of the players in that group, but I don't know them personally. However the description of what was going on sounds correct.

Have you heard any more about Chuck Schumer's statement that the Stim money is an all-or-nothing proposition? You can't just refuse the unemployment part and take the rest?

I really want to know that. Also, by what mechanism the state Legs can overrule the gov - doesn't he have veto power?

So many questions.....

PBI said...

Hi LW,

Agreed that we need to do our part to keep as much accurate information in play as possible. It's been remarkable to me, however, to see what I believe is the beginning of a shift in the attitude and reportage coming from mainstream media outlets. The NYT column on Jindal's response speech is an especially poignant example, and the fact that reactions to Obama's speech last night were positive among rank and file Republicans is a great sign.

I'd be really interested in reading about the group talking process you mention - I'm unfamiliar with the particulars.

I haven't heard anything more about all-or-nothing from Schumer, but I like the idea. That would get the aid where it needs to go AND leave guys like Jindal and Mark Sanford with no political cover.

I imagine state legislatures have veto override mechanisms like they have on Capitol Hill; it probably takes a two-thirds majority...

Cheers,
PBI

lokywoky said...

The group talking process starts with a convening statement about what the purpose of the group is supposed to be - a mission statement or whatever. At the first session, each person introduces themself and says what he/she wants to accomplish in light of the mission statement. After explanation of the process, the large group is broken down into several smaller groups. One person from each group acts as a 'recorder' (the note-takers that were referred to by the MSM). A brainstorming session follows - must be very careful to lay out the rules for brainstorming. No idea is to be criticized, any idea is valid. All the ideas are recorded.

As you can see, other than the introductions, there is no place for ideological grandstanding. Any 'idea' receives the same weight as any other - it is simply added to the list.

Following this meeting (what essentially happened this week) the lists are compiled into a general list, and printed copies are distributed to the participants again. Another meeting will be called. This time, the groups will be tasked to prioritize the list, and develop a brief reason for the top two items.

These priorities are gathered, printed along with the explanations, and when the group reconvenes again, they are asked to vote on the entire list as far as priorities.

A working plan is then developed from this priority list, the group is divided into sub-groups again to look at the work plan and critique and finesse it, and these are submitted to the main group again for approval.

Finally the planning document is presented to the public or the implementing agency.

This is really brief. As you can tell, it is and can be a really drawn out process depending on the topic, how many people participate, and how contentious the planning document becomes.

The group interactions, especially the brainstorming part is designed to build up trust between the participants (no criticism of ideas). The consensus-building format also precludes mostly any demagoguery, and at that point, anyone who doesn't get this generally drops out (not necessarily a good thing - we always tried to find ways to keep these people engaged in the process - it is actually better at the end if they stay).

But overall, most of the participants become engaged with the process and really working on trying to find good solutions.

Hope that helps.

PBI said...

It does - thanks!

I'm familiar with some of the concepts you described and the outlines of the methodology, but it's interesting and informative to see it implemented as you describe.