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  • Liberal Think Tank Fails Statistics

    A chart created by the Center on Budget and Policy Priorities (CBPP) has been circulating among liberal bloggers such as Ezra Klein, James Fallows, and Andrew Sullivan.

    The chart, seen to the right, purports to show that the next decade’s deficits are entirely the result of the 2001 and 2003 tax cuts, wars, bailouts, recession, and stimulus.

    Their methodology fails statistics 101.

    Imagine a basketball team that loses 100-98. It would make no sense to cherry pick one single basket by their opponent and blame it for 100 percent of the loss – letting all other baskets scored off the hook. Yet that is essentially what CBPP is doing.

    Under a current-policy budget baseline, Washington will collect $33 trillion in taxes and spend $46 trillion over the next decade. One could cherry-pick any $13 trillion in spending or tax policies and blame them for the entire budget deficit. CBPP chose to pick the tax cuts, wars, stimulus/bailouts, and economic downturn to equal the sum of the deficit. One could have just as easily singled out Social Security and Medicaid (combined cost: $13 trillion), Medicare and net interest costs ($13 trillion), or discretionary spending ($15 trillion) for blame. There is no mathematical reason to single out the programs CBPP selected while ignoring the other costs.

    So what is driving deficits? A better method would begin with historical averages and determine the moving variable altering the deficit. As the chart below shows, tax revenues (temporarily down due to the recession) are set to return to their 18 percent of GDP historical average once the economy recovers – even if all tax cuts are extended. Spending, on the other hand, is set to end the decade 6 percent of GDP above its historical average. Simply put the 6 percent of GDP deficit increase is the direct result of a 6 percent of GDP spending increase. There is no long-term revenue decline.

    And what’s driving spending? The chart below shows the escalating costs of Social Security, Medicare, Medicaid, and net interest as responsible for nearly the entire inflation-adjusted spending increase projected over the next decade.

    Liberals can spin the numbers any way they want: mandatory spending is the long-term moving variable driving deficits upward.

    Posted in Ongoing Priorities [slideshow_deploy]

    38 Responses to Liberal Think Tank Fails Statistics

    1. rick, washington says:

      How is that both sides are given the same information and both sides come up with two completely different answers… Ridiculous

      • Ben Dover says:

        It's called politics.

        The sad thing is what is this country going to have to go through to get this mess cleaned up? Finger pointing has got to stop. Both sides are equally at fault. Someone has got to step in and force these bozos to do the right thing. Raising the Debt Limit is not the right thing. The American people must demand that government shrink in scope.

        Who's real interests are served in growing size of government? It is not to the American citizen's benefit to have a bloated government. The founding fathers knew this and tried to limit the size and role of government.

      • Art Newpher says:

        It’s simple: One side uses facts and figures in a reputable way. …the other manipulates them to show what they want. Not ridiculous…just lacking in integrity.

    2. Ben, Okla. City says:

      ummm, because the bailouts, wars, tax cuts, stimulus package were the public policy choices made on the MARGIN, from the baseline of an inherited cyclically balanced budget from the 1990s. The other spending cited (SS, Medicare, other discretionary) were programs in place long before Bush took office.

      Remember Conservatives: The choices made on the MARGIN are very important. That's why MARGINal tax rates are so important to you.

      Nice try, though.

      • lankness415 says:

        Haha. So you admit that the chart was bs? The Heritage graphs here are accurate. Your graph is not. You have to represent that opinion in the graph and in the numbers. The CBO did not put in your MARGIN opinion into their numbers, yet it was added in. That is not alright. That is basically lying… or misrepresenting.

    3. Lee, Pennsylvania says:

      The author is correct. It's all one big pot of spending vs, revenue. It doesn't matter when the policy choices were made. Just ask anyone who lost their house after paying their mortgage for many years, but couldn't maintain their income. It was their decision to make the large expenditure many years ago, thinking they would never see a dip in income.

      Tax cuts didn't contribute to the problem. It's not a tax rate issue, but a tax revenue issue. As Ronald Reagan and JFK knew, tax cuts normally generate more revenue because more people are willing to participate in the activity that generates taxes.

      In regards to the growing interest payments portion, if the fed starts raising rates, the deficit will explode, and then the liberal politicians will truly know what it means to be in the minority.

      • Guest says:

        If a country is like a business then taxes are it's profits, we can see that cutting prices in the short term brings in costomers but in the long term undermines quality of products and service. Obviously we need a balance between quality, services and taxes paid.

        If America is a business, it is failing fast!

      • Mike says:

        The Republican response is complete BS. The wars, tax cuts, and down turn were all put in place in the Bush era. The other costs such a Social Security, Medicare, and other entitlements were in the pot prior to that and are paid for by payroll taxes. Even the chart they use to illustrate Obama’s high spending shows that since he has taken office spending has leveled out. There is no way around Bush inheriting a surplus, claiming throughout his tenure that deficits don't matter, spending without paying for it, cutting taxes at the same time that he starts a war, and leaving office at the beginning of a devastating economic downturn can be or should be laid at the feet of Obama. You simply cannot make up your own facts to fit the story you want to tell.

    4. Keith, Pittsburgh says:

      Liberals will always try to spin this as a revenue shortfall problem caused by tax cuts when the data sadly (for them) prove otherwise. Federal tax receipts INCREASED after the Bush tax cuts. If 2010 federal spending had been held to the levels that we spent in 2002-2003, our deficit last year would have been essentially ZERO.

      We could shut down all war spending to zero right now and we would eventually still have a federal budget that is consumed by entitlement spending.

      Remember Liberals & Progressives: (Including Ben above….) – Marginal rates are relatively immaterial. Raise marginal rates high enough and people will simply choose to not earn those high incomes – what rational person would work extra hard for the next dollar only to have government take 70% or more of it away???

      Lastly… let's remember that all of the programs that are bankrupting the US are the product of progressive ideologies going back to the 1930's…. Social Security, Fannie Mae, Medicare, Medicaid….. all liberal Democrat ideas that have bankrupted America and just two generations.

      • Alex says:

        yes tax receipts have INCREASED as you said, as they should. after all, the economy is getting bigger and bigger, and of course there's inflation to factor in

        however…if your theory that tax cuts has actually led to greater revenue is to hold water, you need to think of the actual size of the economy as well. in relation to GDP, tax revenue during the bush tax cuts is lower than it's been since WORLD WAR II. sure, explain that away by saying that the new deal cost a lot of public money…which it did. but budgets have been FAR more balanced in the past than they are now, and the bush tax cuts have a HUGE impact on that

        ps: i agree with you on your third paragraph, which is why i think tax rates shouldn't be graduated, but based on an analogue sliding scale…but that's just me

    5. Laurel Hardy - South says:

      So where are the revenues for giveaway taxes, write offs, subsidies, and incentives to corporations in your analysis? Don't they have to pay anything, especially now when they take these incentives and move the jobs and money overseas so they can't be taxed. All of this killing the American People and our way of life. Do you have no vision of how badly this would hurt people, families, children.

      • Larry says:

        So if the government didn't want over 35% of the profits of these companies they would stay in this country.Liberal ideas are whats making them move overseas.If all of these corporations were to only pay 10% they would stay here and hire more people all of who will also pay 10% which will ultimately meet a higher generated tax base than if they paid the over 35%.So many of u libs have no clue about economics and still can't understand why we're in trouble.So many of u are more willing to put your hands out and cry foul so please "give" me something u look past the fact that if u had a job you'd have a nice home and a new car. Buy your own groceries,T-bone steak not tube steak.You still are so ignorant to research the economies of the past and who controlled our governments during the good and the bad.Let me just give u the answer…. Republicans controlled during good and prosperopus times and dems during bad.

    6. Jennifer, Highland, says:

      How does it look when we consider the federal gov't's constitutional responsibilities and powers and what it actually does? The fed's first responsibility is to protect our property and rights, where does the constitution say it is to feed and house and medicate us? Our founders spoke out against the gov't taking our money on the pretense of taking care of us.

    7. Danita, Georgia says:

      Typical of the liberal left to blame everything on Bush! Won't they ever tire of that? Did Bush spend too much? Yes! Is Obama outspending Bush? Yes! Why can't people wake up and see that pointing the finger and playing the blame game isn't fixing anything? The politicians and power elite don't want us to stop bickering among ourselves over everything because if we do we might notice what they are really up to and do something to stop them! And if the media would actually do their job and be honest with the American people and tell the truth instead of showing their obvious bias toward one party or the other it would go a long way toward allowing us to fix the damage before it's too late! I believe there are democrats, republicans, libertarians, and independents, black, white, asian, hispanic, and native americans, Protestant, Catholic, Jew, Muslim, Buddhist, etc in this country who, even though they differ in much, actually all agree that this country they love is in trouble. I believe that they would all happily work together to turn that around if the powers that be would stop pitting them against one another; which is of course why the powers never will stop using that tactic. We all need to reach out to our neighbors and fellow Americans and find what we have in common rather than what we disagree on! We all need to stop believing everything the media and the politicians tell us and do our own research to find the truth.

      • American genius says:

        Obama is not outspending Bush. The left will tire of that when the right faces the facts.

        You want to say that Bush only spent money up until January 1st, 2009. But he got us into two wars and cut taxes. You think Obama could have just cut that spending on day one? "Sorry Afghans and Iraqis, fend for yourselves. Sorry rich guys, give us back the money please…" We can't even get a freaking bill to pass in the Senate that says we no longer give tax breaks to companies who offshore American jobs because the Republicans filibuster it. And you want to lay it all on Obama (which I would gladly let you do if you presented a real alternative to the guy instead Mitt Romney…I mean really?!?)

        Those are Bush's policy decisions, and though much of the cost happens to be falling under Obama's administration, he's trying to get us out from under the crushing debt that Bush committed to.

        And by the way, nice stump speech, but what are YOU doing to help "Americans and find what we have in common?" Here is your first line friend: "Typical of the liberal left to blame everything on Bush!"

        Need I say more?

    8. Dave Nelson, Silicon says:

      I wish someone would publish an up to date chart of federal revenue and spending that has been adjusted for inflation — and then adjusted again to show the numbers on a per capita basis. That way you can see how much Washington is taking in and spending on a per person basis, in purchasing power, and compare any two years.

      I made a chart like that myself some years ago and discovered the Feds were spending as much in 2008 as they were at the height of WWII — constant dollars, per person. Unfortunately I've not been able to update that chart to reflect current and projected numbers.

      I sure wish SOMEONE (e.g, at the Heritage Foundation… hint, hint) would do that and show us the results because that's the only correct way to understand what is happening with revenue and spending over an extended period of time.

    9. Keith Wold says:

      Can you simplify your problems with their chart? Your analogy explains their motivation but not the errors themselves.

      Can you display a correct chart first, and then show their adjustments. I think I would understand that.

    10. Keith Wold, NYC says:

      Can you show a correct chart and then show how it must be manipulated to get the wrong results? This would expose their process and be easier to follow.

    11. Bobbie says:

      and yet the only "change" is depression, recession and bankruptcy of a country.

      nice try, though.

    12. Laurel Hardy - South says:

      At least with Medicare and Social Security you are helping 98% of the population instead of 2% getting all the wealth. This argument is just unethical, un just, and really bad for the American people when the elite tell us what 98% can live with or without.

    13. Paul Tripp, Omaha, N says:

      In the 90s under Clinton and a Republican congress, spending dropped as a % of GDP pretty much every year, and we had a booming economy. Under Bush and a Republican congress, spending increased every year as a % of GDP, and we had a rocky economy with bubbles bursting every few years, and a major bubble bursting with no new bubble to take its place during the last 2 years of his Presidency with a Democratic congress when spending began to increase faster. Under Obama and a Democratic congress, we have had ridiculous budget increases, especially as a % of GDP, and we're stuck in a horrible recession.

      We need to go back to the kind of spending policies we had under Clinton and the Contract with America Republicans if we want to see any real economic growth.

    14. Brian Riedl Brian Riedl says:

      Ben….so you are saying that Social Security, Medicare and Medicaid — scheduled to cost $21 trillion over the next decade, $40 trillion in the following decade, and eventually 100% of the federal budget — are not as important to the deficit as $3.5 in trillion tax cuts, $1.5 trillion in war spending, etc?

      And why do you take programs with such astronomical growth off the hook? Because they were created before Bush was elected.

      That makes no sense.

      Brian Riedl

      • Superrightwingguy says:

        "And why do you take programs with such astronomical growth off the hook? Because they were created before Bush was elected."

        No, because they are more important to the success of our nation.

    15. Geoffrey A. Landis, says:

      Note that the analysis here doesn't actually say that the other chart is wrong. It just says "you don't have to look at it that way if you don't want to."

    16. Michael Sherman says:

      What would the twin devices of trade and budget be if our nation had policies that promoted natural resource independence? If we had achieved that, say in 2000 (decades after the oil embargo) wOuld there have been any trade deficite? Any national debt? Any federal deficit? Has anyone modeled that?

    17. Mike says:

      Liberals will bend and lie but America is awake now and on to their garbage. News Flash, the Repubolican Party is NOT split and the Tea Party is not dead.

    18. Mike, Chicago says:

      So clearly it makes sense to use a long term average of tax revenue despite the fact that in the late 90's, with higher tax rates, the revenue to GDP figure was at or above 20%? It seems like you failed to understand statistics. When we're talking about a 14 trillion dollar economy, the difference between 18% revenue to GDP and 19% or 20% revenue to GDP is very significant.

      The idea of the top chart is to point out that if tomorrow tax rates were to return to the Clinton-era levels, the deficit would shrink dramatically. No one is disagreeing with the fact that entitlement spending is growing rapidly and one of several major contributors to long term deficits. The other drivers being the irresponsible 2001/2003 tax cuts, the un-funded wars and the recession.

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    20. Ben, Okla. City says:

      Brian: What I am saying is that before the Bush 43 Admin. took office,we had something much closer to a cyclically balanced budget…and we should start from there in understanding where things have gone awry. If you believe in counter-cyclical fiscal policy (and since you're probably more conservative than I am, I'm not assuming that you are. Maybe you are, maybe not), then it is critical that the government run surplus budget deficits when the economy is humming..so that it can spend more to support aggregate demand during a downturn. That way, over time the budget is balanced.

      The decisions made by Bush and Congress in the 2000s took us away from a cyclically balanced budget. They took a status quo of long-term balance (ex Medicare and SS, I grant you) and added two unfunded wars, a new prescription drug benefit for Medicare beneficiaries that wasn't paid for, and cut income taxes across the board. So, from that perspective, I think the CBPP method is right on in its analysis.

      I'm not saying Medicare and SS are in good shape. But we'd have a lot more flexibility in dealing with those problems if we had not made the other decisions I mentioned above in terms of income tax cuts and discretionary spending. If we fixed Medicare and SS tomorrow by a combination of increasing the payroll taxes and reducing benefits…the budget is still not fiscally balanced…and that is the fault of Bush and Congress in the 2000s.

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    22. Jerry Lewis says:

      Why do charts make people so stupid? One delusion is the fact of all that orange is estimated tax revenues from a tax increase.. those are estimates pulled out of someone's backside, and it depends on whose backside as to how large those numbers will become.. Has any tax increase ever, EVER came close to bringing in estimated levels? No, but the estimated income is already spent plus a certain percentage necessary for re-election funding.

      And with the tax cut, why would the brilliant, ultra enlightened progressive members of Congress deem it proper, under the estimated decrease in funding, to spend even more money than they knew could possibly come into the Federal coffers?

    23. Kevin H, college par says:

      Brian, in 2001 there were projected supluses, even taking into account the growth of Medicare, Medicaid and Social Security over the next decade. There's no denying these 3 programs will add large amounts to the longer term deficits and debt, but for the projected deficits and debt over the next decade, the vast majority of it was due to Bush-era policies and the economic downturn. No chart can dispute that fact.

      The entitlements have to be reformed, but you might agree, it's not very easy to do. Look at 2009 and 2010 and how the Democrats were paid back for attempting to deal with health care (this single biggest factor in future deficits and debt) – and it's easy to see why no policymakers in the last handful of decades have had the courage to take these issues on – and why Ryan and the Republicans are now getting hammered to badly. It's just politically risky to take on entitlements, but it has to be done.

    24. Ben, Okla. City says:

      RE: my post above, a correction:

      "then it is critical that the government run surplus budget deficits when the economy is humming"

      should read : "then it is critical that the government run surplus budgets when the economy is humming"

    25. TC, Minn says:

      The facts really are simple:

      - A Democratic President and a Republican Congress balanced the budget and created a surplus that had the debt on the decline.

      - A Republican President and a rubber stamp Republican Congress spent like drunken sailor boys on a weekend bender, destroyed the balanced budget and ran up huge deficits to enrich their buddies and fight an unnecessary war. Your argument above fails to note that the budget was balanced prior to this eight year period.

      - Republicans now blame a Democratic President for the whole mess and demand to be put back in charge so they can continue to prop up the rich – and their hopes rest entirely on their ability to keep the Moronic Majority (aka Fox Drones) inflamed with simple talk about socialism (which the MM doesn't understand), and campaign-time talk about Christianity, abortion and gay marriage.

      The Fox Drones eat it up because they are mindless sheep and can't do nuance or complexity.

      Before you flame, I assure you I am neither liberal nor a Democrat.

      And with that, Fox Drones … flame away.

    26. Bill, Tijeras NM says:

      I've looked at Brian's analysis and cannot find his evidence regarding the impact of the Bush tax cuts. Given the set of projections and assumptions in his analysis, how much would the deficit be reduced over this period if the tax cuts ended in 2011? It makes no sense to discuss this without putting forth an alternative analysis. We have CBPP's, what's the Heritage number?

    27. Martin Adamo says:

      Actually I am really happy about this conservative response. I think it makes some good points. The main point of which is whether it is "bush, the wars, the tax cuts" or "social security and medicare" (both pegged at 13 trillion, its not the decisions of PRESIDENT OBAMA that created all this debt as they lead people to believe. It is true that wars, tax cuts, and entitlements are a big part of the problem. That is a lot different from OBAMA RUNNING UP ALL THE DEBT. Finally we have both sides talking about FACTS about what is going on..

    28. Gary Reber says:

      The chart purports to show that the next decade’s deficits are entirely the result of the 2001 and 2003 tax cuts, wars, bailouts, recession, and stimulus.

      No one can dispute that the Bush tax cuts, the Iraq and Afghanistan wars, stimulus/bailouts, and economic downturn can equal the sum of the deficit. One could also single out Social Security and Medicaid (combined cost: $13 trillion) or discretionary spending ($15 trillion) for blame. All costs are factors adding to the deficit and the mounting national debt.

      The solution is economic growth but CRITICALLY simultaneous BROADENED OWNERSHIP CREATION to empower EVERY American to acquire private, individual ownership in future income-producing productive capital assets embodied in the non-human assets of companies such as human-intelligent machines, superautomation, robotics, digital computerized operations, productive land, structures, etc. Their acquisition needs to be paid for out of the future income streams (profits) of the investments themselves, and not rely on people having to pledge savings (equity), and the investments insured through capital insurance and government reinsurance backed by the Federal Reserve Bank. This will result in simultaneous productive capital growth and consumer earnings to support the buying of the future products and services produced as a result of the investments. You cannot have mass production without mass human consumption. It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.

      If we fail to broaden future productive capital ownership then we will continue to experience long-term revenue decline and greater dependency on taxpayer- and debt-supported government welfare, open and concealed.

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