Time Magazine Brad DeLong Death Spiral Watch (Reporting on Fiscal Policy/Michael Scherer Edition)

Bush Administration Fiscal Policy

Duncan Black writes:

Eschaton: Oh Well: So much for that. 2003:

(AP) President Bush's goal of cutting in half a projected $500 billion federal deficit within five years is being dismissed as too timid by conservatives, unachievable by analysts and laughable by Democrats. Mr. Bush will include the objective in the $2.3 trillion budget for 2005 he sends Congress in February, nine months away from the presidential and congressional elections. The goal is backed by many Republicans, but conservatives want a bolder move against the record deficits and big spending increases the administration has run up...


(AP) A senior Bush administration official says the budget deficit for this year will set a record in dollar terms, approaching $490 billion. The official said Monday the deficit was being driven to record levels by the sagging economy and the stimulus payments being made to 130 million households in an effort to keep the country from falling into a deep recession. A deficit approaching $490 billion would easily surpass the current record deficit of $413 billion set in 2004...

I remember 2003. The Bush administration highballed the then-current deficit--claiming it was going to be $500 rather than $413 billion--in order to lower the bar for "cutting it in half." And then they lowered the bar further by telling the economists that even though Bush said and the reporters wrote was "cut in half" what they mean was "cut in half as a share of GDP"--which would give us an end-of-administration deficit of $312 billion.

A cut from $413 to $312 billion should not have been that hard to do--if they were serious about restraining spending. They weren't.

I do remember telling economists working for the Bush administration in 2003 that they should not be such great cheerleaders for Bush's policies--that robotic repeating of talking points like the president's policies, through this spending restraint, will reduce the budget deficit in half over the next five years... (A) It wasn't true, and you shouldn't tell lies. (B) It would with high probability come back to bite them in the b--- in five years, so that while it was in George W. Bush's and Karl Rove's interest for them to say it in 2003 and 2004, come 2008 and 2009 they would pay a reputational price.

They were not happy.