Thursday, July 28, 2011

"What Became of Georgie Bush?", Or, "My! What Big Debt We Got, Grandma!"

The first graph shows the difference between budget projections and budget reality. In 2001, President George W. Bush inherited a surplus, with projections by the Congressional Budget Office for ever-increasing surpluses, assuming continuation of the good economy and President Bill Clinton’s policies. But every year starting in 2002, the budget fell into deficit. In January 2009, just before President Obama took office, the budget office projected a $1.2 trillion deficit for 2009 and deficits in subsequent years, based on continuing Mr. Bush’s policies and the effects of recession. Mr. Obama’s policies in 2009 and 2010, including the stimulus package, added to the deficits in those years but are largely temporary.

Anybody seen George W. Bush lately?

Other than a brief period where he came out of hiding at his mansion complex near Dallas to bask off the reflected glory of Bill Clinton's trip to meet and talk to Haitian earthquake victims (and wipe his dirty hand on Clinton's shirt at one point) or a few book signings for his "Decision Points" book (all done here in the United States to avoid problems with torture and the World Court) George is AWOL.

It is odd that Bush wants no part of the limelight for the job he did for the two terms he and his merry men and women served as the Chief Executive of the USA. Or maybe it isn't, given that the job was probably a major contributor, but not the only one, to the enormous recession we are still suffering from as a nation.

O.K., so Bush left the nation as it was swirling down from huge losses of credit in confidence in the wake of under regulated "too-big-to-fail" investment banks and a series of major tax cuts that benefited the wealthy but added no income to a national government busy fighting two major wars halfway across the globe. Add to this the Prescription Drug Plan for Medicare he got through Congress, which cost hundreds of billions but didn't raise taxes nor even allow the government to bargain with Big Pharma for reduced prices on drugs (as the Veterans Administration does) and the beginnings of the great corporate banking bail-out and the housing bubble burst that somehow he and his cabinet and their friends at the Federal Reserve never saw coming, or saw and just didn't care, and you have the situation for which the present administration is taking the majority of the blame.

Could it be that George W is lying low to not remind people he deserves a hefty share of the blame for the troubles we're in? He is, after all, an exercise buff and hardly in his dotage. Why was not out campaigning for his flock back in 2010? Why isn't he part of the current deficit debate, as is President Clinton who recently said he would allow the Congress to default on government debt and would invoke the 14th Amendment to stop such shenanigans?

I got an idea. Maybe George knows he screwed up and, indeed, just wants to lay low.

O.K, what did Georgie Boy leave us in economic terms when he left in January 2009?

According to two articles by Paul Wiseman of the Associated Press, the United States has the fifth highest debt percentage in the world among developed nations, comparing what it owes ($14.3 trillion) to the total economy. What the federal government takes in is 14.4 percent of the gross domestic product, the lowest share since 1950. (Thank the Bush tax cuts of 2001 and 2002 for most of that. Also thank the GOP Congress from 2001 to 2007 whose rank and file uped the debt ceiling several times.)

17.4 percent of the GDP of the USA is spent on health care. The next highest is twelve percent, spent by the Netherlands. It's the highest percentage among wealthy countries. Among 34 other wealthy nations, the average spent on health care is only 9.5 percent, according to the Organization for economic Cooperation and Development. (What did Bush do about that. Preach about "individual health care accounts", as if the average family could salt away 100,000 bucks in case one of their children gets in a car accident or contracts leukemia. Nice try , George.)

Surely, health care reform wasn't a silly idea after all.

"We as a society will either have to pay more our government, accept less in government benefits, or both," according to Douglas Elmendorf of the nonpartisan Congressional Budget Office.

I'm guessing the only rational way to go about this is to look seriously at both revenues and cuts in benefits. Obviously, with the diminishing power of the middle class in America, any choices not cutting entitlements will be much harder to achieve unless voters stop accepting the "trickle-down" economic policies and the Lords of the Flat Tax and the No New Taxes-Ever Bunch like radicals Michelle Bachmann and the pledge-happy lobbyist Grover Nordquist stalk the country, offering simple 19th Century panaceas to 21st Century issues. Bush provided cover for these nimrods for eight years.

But has the middle class really lost so much clout since Bush the Younger left office? Well, yes. "Wages and salaries account for just one percent of economic growth since the (US) recession officially 'ended' in June of 2009." Corporate growth on the other hand, according to the Wiseman Article "Boom in Corporate Profits, Bust in Jobs and Wages" accounted for 88 percent of the growth in the economy. (This is unprecedented in recent American history. Prior to Bush assuming office, previous recessions over the last thirty years had seen middle-class buying power rise anywhere from 15 to 50 percent after a recession receded. The average corporate gains after a downturn were anywhere from 28 to 53 percent.

US Corporations are seeing that the middle class has lost its buying power and is either rushing new jobs overseas or simply holding onto their accumulated post-recession bank of funds (estimated at 1.9 trillion dollars.)

And because of the present gridlock in Washington, in part caused by Bush's role of letting the adjustable-rate mortgage and over-the-counter derivatives breeds of foxes to guard the financial hen-house, we have a nation where there is no clear way ahead for the government to form a fiscal policy on. (Bush could have rectified some of this by impasse by coming forward and supporting a new series of regulations and strengthened agencies to stop what happened on his watch from happening again.)

Instead, he works out in his home gym and keeps his head low. Ex-Presidents are supposed to help the nation with their collective wisdom, not hide like a bandit on the lam. Surely Bush has learned something from the Economic Titanic he helped steer the nation into. You'd think he'd want to help make up for it, if only to get another big book deal.


  1. From the New York Times article from July 24, "How the Debt Grew" by Teresa Tritch: "A few lessons can be drawn from the numbers. First, the Bush tax cuts have had a huge damaging effect. If all of them expired as scheduled at the end of 2012, future deficits would be cut by about half, to sustainable levels. Second, a healthy budget requires a healthy economy; recessions wreak havoc by reducing tax revenue. Government has to spur demand and create jobs in a deep downturn, even though doing so worsens the deficit in the short run. Third, spending cuts alone will not close the gap. The chronic revenue shortfalls from serial tax cuts are simply too deep to fill with spending cuts alone. Taxes have to go up."

  2. Now can you explain why the Dems that controlled Senate ,House and President could not or would not pass a budget and now that the GOP has the house it is all their fault. I blame both Bush and Obama for this mess. When Clinton and the GOP balance the budget. it should have stayed that ay.

  3. It's NOT all the GOP's fault, and I never said it was,Tess. I'm simply saying George W isn't owing up to his share. He's practically a recluse. And I speculated
    as to the why of this behavior.

    But I don't believe both sides are equally to blame as far as party policy goes. The Democrats until the 1990's supported regulation of the heights of the economic banking and commercial bond trading that had stood for decades.

    It's mostly the fault of big banking lobbyists and the deregulated housing markets, and that has traditionally been the realm and allies of the Republicans, who demonize the only entity that watches over the powers that multi-national banks and stock and bond dealers have over people who have to work in the Main Street economy for a living.

    But the trouble is many GOp operatives pretend Obama inherited this wonderful economy...and it was actually the worst in seventy years. The public expected this to be a normal recession where housing prices and jobs would rebound in about 18 months...when that didn't happen, they elected the tea party folks with their easy formula...blame the government for everything and forget that Wall Street controls most of the power on Capitol Hill thanks to their packs of "Gucci Gulch" K Street lobbyists.

    Obama and the Democrats in Congress spent a lot of time on health care reform. If you noticed in the blog above, we spend more per capita than any other nation on health care and that took so much of a fight that the budget had to be de-emphasized. There's your answer on the budget.

    I do agree we were better off when Clinton was at the helm in someways, but in the long term it was a disaster. Clinton signed legislation that made it easier for investment and regular commercial banks to co-mingle, and the losses rung up by the 2008 Wall Street/Mortgage Bubble Disaster came directly out of the GOP-led Congress and their Financial Services Modernization Act. This bill was pushed through the Gingrich-led Congress in the House and by Senator Phil Graham of Texas, whose wife Wendy Lee was on the board of Enron and other companies, and Jim Leach of Iowa. Enron was one of the worst examples of a company practising predatory capitalism in history. People went to jail over it.

    If you only see this as a party affiliation thing, you will never understand how Washington really works. Follow the money!

    I think it was the 1930's Glass-Steagall Act that should have been stayed where it was. Moderate Democrats and anti-government GOP types wrecked an economy which was headed back to a sound footing.

  4. "Follow the money"

    I've said that more than once, Doug - and it's for a reason intimated in your post but not quite stated in so-many-words:

    Money, like math, is a remorseless beast. Two, plus two, always equal four - not five; not six.

    (Orwell created a society where this was possible, depending on what the ruling-class wanted - and, in that sort of reality, it's possible in some cases to make it so - but there have to be, as he also pointed out, an uberclass [in '1984', they were called the Inner Party] where truth, reality, and logic all do apply - even in the most-draconian of societies, someone has to keep the real numbers real in order to jimmy them up and create the fake ones.)

    Here in America, the numbers can, indeed, be found - there are vestiges of impartiality left (the GAO/OMB are pretty impartial and not beholden to politics) - it's there where we can find the raw figures to determine things like real unemployment and real inflation.


    I wouldn't be surprised to see the bastard living in Paraguay, where he built that compound. I'm supposing he figures it thus: Given the apathy and moral-intelligence of today's American, the handful who truly do understand his culpability for things like torture won't be able to take the story above the ambient noise-level long enough to get anything done - and his minions have done a superb job of tagging Obama and the Dems with everything from the late Bush-era bank-bailouts to full responsibility for the Second Great Depression.

    You're quite right that instead of working on a budget, Obama cashed in all of his political-chits to try and fix health-care. The result was a bastardized bill which no one wanted and is largely unworkable.

    (Tess: If you want to see who's responsible for the debt-mess by-administration, take two minutes and look at the chart below. It was created by OMB/GAO numbers. If you don't believe them, neither I nor anyone else can help you:)

  5. Doug I just came on and there is most definately why over and beyond all of why GWB has not been scene within the public eye. 1. He would do harm to his party 2. He would do harm and people would recognize what he did harm to the country and the party. 3. He is eating pretzels while drinking koolaide with a mere few that might consider to see him. Excusez Will....

  6. NO NO......what has happened right now is there was a government of two that full well knowing that this was Will a bipartisan situation. To even think to run in any office without even conceiving otherwise is plain dumb. That can be wrote in the most elegant manner but I know Doug well enought that I can say this whole situation has been the dumbest within the history of America.

    And when parties cant come together even as now......I don't know what the fundamentals of America are as they don't service the average American. Doug I believe you know where I am coming from.
    At it's not Canada.

  7. That's true and its one of the most frustrating things about all this is the cogntive dissonamce the public are willing to accept for the sake of not having their cherished values tested.

    There are certain hard facts at work here, as you lay out in the chart, Will. The government deficit was tripled under Reagan--that is a fact. It went up even more under George W. Bush, who also went to two wars without raising a dime. These are facts.
    Clinton, our big Bubba of the American "left" went way right in his second term on stufflike the Commodity Futures Act that co-mingled private mortgae giants with outfits like Fannie Mae that were supposed to help people who could barely afford a loan, not jump on the "roboloan" wagon. Bubba signed away safeguards against the economic collapse of this nation. Another fact.

    None of these can make political partisans happy--save a few folks who tell the truth most of the time like Bernie Sanders but who are unelectable outside of their states or districts--but they are out there in the papers and periodicals everyday. Why people can't read and absorb and learn from some of this is the final mystery.

  8. Sorry I did not think you meant that. I did not mean it negative, it is just that Obama blames it all on Bush. I will say that Bush said when he left office, that he would stay out of political discussions. He will not run the prez down, make comments pro or con about the job Obama is doing. That is most likely the reason you do not hear from him. Even on FOX News and O'Reilly show he refused to make negative comments. Time will tell who did or did not do what. most likely not in my lifetime. I will say that I did not vote for either Bush or Obama. i thought they both would make lousy leaders

  9. I appreciate your honesty Tess, and I apologize if I extended your argument beyond where you were taking it.

    I can't watch shows like Bully O'Reilly for very long. He makes my teeth grind and dental insurance is so expensive. :-)

  10. Yes, he was always portrayed by many as a man not interested in very much. I wonder honestly why he wanted the job in the first place.

  11. I was at the point watching all the nerws channels from PBS to CNN to Fox and MSNBC last night that I wish we could rent the Parliament in Ottowa or London or Canberra and let them give the United States a financial plan to reduce the deficit. We are a broken nation right now politically. Divided government is clearly not working. I don't say that with an ounce of glee either.

  12. Clinton was no angel, politically or personally, and that's also a fact.

    He was one of the chief architects (along with Larry Summers) of the deregulation of the financial system. Surplus or no; he was one of the guilty parties - he set the stage for what came after. Bush would never have been able to do what he did (he's not that bright) were it not for Billy-Jeff.

  13. The arseholes on the far Right are absolutely ecstatic, though, Doug - you've seen the quotes from the Teabagger Legion just as I have; they're actually looking forward to a government shutdown.

    Ask any of their supporters what they want, and they'll universally say, "I just want to be left alone!"

    It's impossible to get them to understand that this can't be done today - plus, most of them are completely unwilling to admit that they're not 'left alone' in any sense - they're the beneficiaries of things like roads, sewers, police, fire, national defense, etc.; etc.

  14. Oh yeah, Will, they think it's a game. We'll see how many might spit out the kool-aid after a couple more weeks.

    Yes, this is not a little principality like the far right would want it to be--just a little republic which happens to spend a few hundred billion on wars and other military matters.

    One of the biggest tea party states in the Union is South Carolina, which gets $1.35 back for every dollar their taxpayers send to Washington and the other states. Yet guys like Jim DeMint can act like they are all being abused by the Feds.

    They should be so "cheated".

  15. If you've been to South Carolina, you know that nearly the entire population is just like DeMint.

    (I worked for a company with a division there some fifteen years ago. I swear, the state should put up customs-posts at every airport and border-crossing - because it's like entering another country....)

  16. That's crazy. I've only been to east Tennessee and North Carolina. I got a sort of feel for that narrow-minded sense of white antagonism to the government in all forms. Some people think it has to do with Civil War or Civil Rights or the Scots-Irish settling in regions beyond the Piedmont in the Colonial days.

    I don't know.

    At this point......I don't care.

    Someone once said South Carolina was too small to be its own republic and too big to be an insane asylum. I'm just sayin'.

  17. That's the reality, on the nose, Doug - I wrote a piece on that very topic, drawing from my days studying history as a wee lad in college and subsequent work by other people.

    The semiliterates from the border-ridings of Scotland and Ireland brought a heavy dose of 17th-century Calvinism along with a general mistrust of any form of authority. They were also, in the main, a bellicose group, which fought with each other when they ran out of outsiders.

    These people have settled in what now form the "red states" of America.

  18. I would appreciate your source of credibility on the quote above. Au contraire!!

    "Even on FOX News and O'Reilly show he refused to make negative comments."
    I wouldn't know about these shows, but as I recall, Bush comments were all non sequiturs anyway.

    "Time will tell who did or did not do what."
    It already has.

  19. Thanks Will.

    Yes, many of their ancestors were born with a chip on their shoulder, and it rolls on and on. And some people say history doesn't matter. I beg to differ, as am sure you do can well.

  20. In a time where most everyone exercises their own points of view. How you tend to this within each blog of which you have wrote. Not only within your manner, but within your understanding. I am reading the writings of a very wise man whom does know how too look over all of this with a perspective of your own yet there are very few that even parallel what you write and handle within a very diplomatic manner of what is wrote to you. Before I retire I wished to mention this as of all the blogs during this time you have literally blogged on several things and I believe Doug that within this duration I again have observed one which is one of a kind. I have reviewed a few and if there was a rating of one that enriches what blogging is even during the these times I don't know where I would place it but you certainly do a justice within what I see as the art of good blogs.

    I didn't know where to place this but certainly did wish to make the mention...You do do justice to blogging.

  21. Devolution, localism, subsidiarity call it what you will the deconstruction of the corporate United States is the only real option, but the process is already under way I think, the process is global.

    The trick now must be for alternative none cash (electronic) currency systems to be enacted.

    Excuse yourself from the debt repayments, opt out after all it's not your debt is it?

  22. Thank you. I must also add I have been inspired by your blogs and those of others who contribute much more to this Multiply site than my occasional ramblings.

  23. What we see here from the Berkshires of New England why well be the shape of things to come in many places , AA, given the lack of control people are now feeling from the ravages of the global macroeconomy.
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