While and after reading the Orange County Register, Sunday, August 12, 1012 article by Mark Steyn. Steyn: America turning into Europe? We should be so lucky. I felt that the reporter was making statements that went counter to my own readings. I decided to checking upon some of the “facts” in the article.
Following is an article quote:
Obama has added $5 trillion to the national debt, and has nothing to show for it.
There are two statements within this sentence. Let us examine each separately.
#1 Obama has added $5 trillion to the national debt.
It may seem that Mr. Steyn wants to paint the Democrats as a spending party. The opposite may be the truth. Wikipedia states the following:
Economist Mike Kimel notes that the five former Democratic Presidents (Bill Clinton, Jimmy Carter, Lyndon B. Johnson, John F. Kennedy, and Harry S. Truman) all reduced public debt as a share of GDP, while the last four Republican Presidents (George W. Bush, George H. W. Bush, Ronald Reagan, and Gerald Ford) all oversaw an increase in the country’s indebtedness.
I degrees by including former presidents. Let us look at Obama. In the same Wikipedia article it states that as of 2009
$9 trillion in deficits forecast for the 2010–2019 period, $5 trillion are due to programs from the prior administration (President Bush), including tax cuts from 2001 and 2003 and the unfunded Medicare Part D. Another $3.5 trillion are due to the financial crisis, including reductions in future tax revenues and additional spending for the social safety net such as unemployment benefits. The remainder are stimulus and bailout programs related to the crisis.
In this article it states that a statistical “swing” occurred from expected forecast budget surplus in 2001 to a $2 trillion deficit by 2011. This surprise was due to the following factors:
Revenue declines due to the recession, separate from the Bush tax cuts of 2001 and 2003: 28%
Defense spending increases: 15%
Bush tax cuts of 2001 and 2003: 13%
Increases in net interest: 11%
Other non-defense spending: 10%
Other tax cuts: 8%
Obama Stimulus: 6%
Medicare Part D: 2%
Other reasons: 7%
Wikipedia seemed to add the “swing” factor because the US Government did not see the train wreck coming, financial crisis that morphed into a recession, and who could blame them. Note that the financial train wreck needed to be cleaned up. The Republicans want to paint Obama as spending his way out of this recession. Can you think of any other productive method that gets fast results? Look at the numbers above. The Bush tax cuts helped to increase the deficit more than double what Obama has spent on the stimulus! This may be why the Democrats want the wealthy to pay their share and thus gain a sizable deficit reduction.
#2 Obama has nothing to show for it.
By most economic indicators, the Economic Stimulus Package was a success. In March 2009, before it was launched, Q1 GDP was -6.4% (it has since been revised to -4.9%)and the Dow had slid to 6,500. By Q4 2009, GDP was +5% and the Dow had risen to 10,428. Not all of that success can be attributed to the Stimulus Package, since expansive monetary policy and strong emerging markets also helped boost the economy. However, those were all in place in March 2009. No doubt, the economic stimulus package inspired the confidence needed turn the economy around.
LA Times article uncovered a rather unknown aspect of using the stimulus spending to reform Washington. Instead of across the board hand outs Obama specified competition-based, peer review, results-oriented grant programs.
Obama’s stimulus did begin to usher in a new era of rationality through competition, in which you had to do more than just check the right boxes and extend your hand to qualify for a federal check.
The Fiscal Times.com (TFT) Obama’s Stimulus Plan: What Worked, What Didn’t.
In a wonderful interview with Michael Grabell concerning his book “Money Well Spent?: The Truth Behind the Trillion-Dollar-Stimulus, the Biggest Economic Recovery Plan in History.
An incorrect assumption is that the stimulus package just filled potholes and didn’t create any lasting legacy. There are some very big projects we’ll be able to look back on 75 years from now and say, that was because of the stimulus. The Fourth Bore, the Caldecott Tunnel in Oakland in its suburbs, the Cleveland Interbelt Bridge got $79 million to replace this 50-year-old bridge in downtown Cleveland, and South Dakota is building a tribal school for the Sioux tribe’s Crow Creek reservation. In New York, Moynihan Station, the Second Avenue subway, Staten Island’s ferry terminal, the Fulton Street transit center – there are big projects that got a significant chunk of money and now can go forward in a bigger way.
Note that we just checked on the “facts” within a wide circulated newspaper in Orange County California of a single opinion piece by a single reporter. The “facts” allegedly appear to be slanted as pro GOP. Orange County has a reputation of being heavily GOP voters. I have noted that the Wall Street Journal editorial page, in my opinion, is pro GOP. The Orange County Register is Libertarian, thus expect slant opinions. Might we draw from this small example that some sources of our news opinion sections are pander platforms? The extended problem for all of us is where can we go for good solid reporting of the news and information? Should opinion pieces allow for individuals to make up “facts’? I can understand different people coming up with different viewpoints and is not that the intent of the opinion section of a newspaper? Just make sure your arguments are based on fact that has some solid basis. The Wall Street Journal allegedly is no different, in my opinion, in publishing error riddled opinions. Newspapers are loosing readership. Could this be party due to their flawed product?