David Leonhardt‘s carefully-researched column in yesterday’s Times breaks down the causes of the increasing budget deficit. The bottom line: Don’t blame the Obama agenda, “it is responsible for only a sliver of the deficits.”
Courtesy of Matt Yglesias, here’s a simple summary chart:
But Alex Tabarrok at Marginal Revolution remains unimpressed, arguing that:
The reason why the hundreds of billions of dollars of spending in Obama’s agenda is said to be responsible for only a “sliver” of the deficit is that the agenda also includes taxes, thus the net effect is low.
Umm … that’s exactly the point. When shifts in spending are matched by shifts in taxes, the deficit doesn’t change.
and 
. You can also watch it on 
That assumes raising rates will always raise revenues. The millionaire tax in Maryland proved that wrong.
Spending is the only thing the government can really control. There is no exact science to raising revenues.
I am unimpressed that a president who campaigned on “change” is given a pass when he fails to make change. Any continuation of a Bush policy that adds to the debt is the current president’s problem and fault.
The chart fails to consider time, Bush had 8 years to accumulate the deficet dollars in the graph. Obama has had less than 5 months. I can not see the raw data in the chart. But if we say 5 months is 1/2 a year- Bush’s deficet took 16 times longer to accumulate than Obama’s has. Is the Obama share of the charted deficent less than 1/16th of Bush’s?
When you don’t roll-back the previous president’s policies, they become yours.
Sorry – Obama and Congress have complete authority (not veto-proof, but that doesn’t matter with the Democrats controlling both branches) to override past Bush policies. Therefore, the 111th Congress and Obama are still to blame for the current deficit.
Given the amount Obama is spending, it’s hard to believe that he’s responsible for only a ‘sliver’ of the pie chart. That said, I know Bush was also fiscally irresponsible. Let’s assume the pie chart is accurate. An underlying assumption seems to be that a balanced budget is above all else in importance. Increased spending should never be justified by increased taxes. Americans get hurt, all across the income spectrum.
The seperate categories for “Bush Policies” and “Extension of Bush Policies” is a bit deceiving. I think it implies a huge portion of spending is money that Bush hadn’t spent, but would have. If I am reading correctly, it is money that the new administration has spent a lot on, that Bush spent a good deal less on.
This isn’t to say I believe in the myth of the fiscally responsibile Bush administration, but I think “Extension of Bush Policies” and “Obama Agenda”, as well as the “Stimulus Package” could all be fairly blamed on the current administration.
It is not just the deficit that needs looking at; it’s the size of the government.
Also, how much of this is based on Obama’s wildly optimistic economic growth estimates, which are already, as per Greg Mankiw, falling far wide of the mark?
Though, one could argue that Obama’s increased taxes are causing the “Recession” slice of the pie to become larger.