August 24, 2011
That is how CBS News would report it. In its discussion of the rise in the deficit in the years that President Obama has been in office it tells its audience:
“Mr. Obama blames policies inherited from his predecessor’s administration for the soaring debt. He singles out:
- “two wars we didn’t pay for”
- “a prescription drug program for seniors…we didn’t pay for.”
- “tax cuts in 2001 and 2003 that were not paid for.”
He goes on to blame the recession, and its resulting decrease in tax revenue on businesses, for making fewer sales, and more employees being laid off. He says the recession also resulted in more government spending due to increased unemployment insurance payments, subsidies to farms and funding of infrastructure programs that were part of his stimulus program.”
It is likely that President Obama blames the recession for the rise in the deficit because it happens to be true. For example, the deficit was 0.4 percent of GDP in 1974. In 1976 it was 4.0 percent of GDP ($600 billion in today’s economy). In 1981 the deficit was 2.6 percent of GDP. In 1983, in the middle of the recession, it hit 6.0 percent of GDP. In 1989 the deficit was 2.8 percent of GDP. The recession raised the deficit to 4.7 percent of GDP in 1992. And in 2000 the surplus was 2.4 percent of GDP. The impact of the recession, coupled with the war and the Bush tax cuts, turned this into a deficit of 3.5 percent of GDP in 2003.
In other words, this is not a debatable point. Recessions lead to deficits, and severe recessions, like the one that accompanied President Obama’s move to the White House lead to large deficits. Reporters should know this and if they do, they should identify this as a fact to their audience, not an assertion by a politician to be viewed with skepticism.
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