Click on the photo below to link to a Washington Post fact-checker site. You can then hyperlink to over 50 facts for each of Romney and Obama (each small square is a hyper link with a window that will tell you what fact is being checked), so enjoy reading about the truth behind over 100 campaign claims.
Below are links to a variety of sources and articles on the economy.
The following are from Ezra Klein. Klein is a columnist at the Washington Post, as well as a contributor to MSNBC. His work focuses on domestic and economic policymaking.
More Data and Articles.
Greed and Debt: The True Story of Mitt Romney and Bain Capital (Rolling Stone)
A president who has had a patchy first term now needs to make a convincing case for a second one (Analysis from the Economist)
From the Wall Street Journal, HERE.
The Presidential race is boiling down to one dominant issue: which party’s policies will do more to help the financially stressed American middle class. President Obama’s campaign theme is that Mitt Romney and the Republicans cater to the rich, while Mr. Obama cares about struggling families.
He may care, but he sure hasn’t done much for them. New income data from the Census Bureau, tabulated by former Census income specialists at the nonpartisan economic consulting firm Sentier Research, reveal that the three-and-a-half years of the Obama Presidency have done enormous harm to middle-class households.
In January 2009, the month President Obama entered the Oval Office and shortly before he signed his stimulus spending bill, median household income was $54,983. By June 2012, it had tumbled to $50,964, adjusted for inflation. (See the chart nearby.) That’s $4,019 in lost real income, a little less than a month’s income every year.
Unfair, you say, because Mr. Obama inherited a recession? Well, even if you start the analysis when the recession ended in June 2009, the numbers are dismal. Three years after the economy hit its trough, median household income is down $2,544, or nearly 5%.
Add the authors: “The overall decline since June 2009 was larger than the 2.6 percent decline that occurred” during the recession from December 2007 to June 2009. For household income, in other words, the Obama recovery has been worse than the Bush recession.
It’s true that the Bush years overall were also not great for household incomes. According to Sentier’s analysis, real median household income is down about 8% from $55,470 in 2000 before the dot-com bubble burst. Some of this decline is due to the continuation of a trend of smaller family size, lower fertility rates and more Americans living alone. But some was also due to the subpar economic growth across the 2000s.
That slow growth trend has become worse since the latest recession, and this is where Mr. Obama is implicated. The President portrays the financial decline of American families on his watch as part of a decades-long trend. He’s wrong. Real income for middle-income households rose by roughly 30% from 1983 to 2005, according to the Congressional Budget Office. The political left likes to blame the ebbing of union power. But nongovernment unionization fell dramatically in the 1980s and ’90s, and incomes rose.
So what does explain falling real incomes? Slow growth, yes, but another culprit has been rising prices—especially for food, gasoline, medical procedures and college tuition—that have eroded worker purchasing power. The Federal Reserve claims this is no problem because “core inflation” has been relatively contained. But core inflation excludes food and energy prices, which are two of the biggest components of consumer budgets.
The big pay freeze is also the bitter fruit of public schools that have failed to teach the basic skills and knowledge needed to succeed in a competitive global economy. Rising health-care costs have also forced employers to take money that used to go into higher wages to pay higher premiums.
A key driver of higher wages in the 1980s and 1990s was a surge of capital investment in computers, plant and equipment, which made Americans workers more productive. When Mr. Obama pledges to raise taxes on investment income (capital gains, dividends and small-business profits), he is making it costlier to innovate and modernize. That plays out over time into slower gains in productivity and wages.
Consider the toll from America’s corporate tax rate, which is the highest in the industrial world. A 2011 study by economists at the American Enterprise Institute found that because of the capital flight from the U.S. as a result of this high rate, “every additional dollar of tax revenue [from the corporate tax] leads to a $4 decrease in aggregate real wages.” American workers would be the biggest beneficiaries of tax reform.
The new income data reveal other eye-opening trends. The group that has suffered the most during the Obama Presidency has been black Americans, whose real incomes have fallen by more than 11%.
Mr. Obama also likes to say that government workers like teachers are hurting and the private economy is doing “just fine.” But the data indicate that over the past three years households with government workers saw their incomes decline less than households with private workers. The public-private pay gap is now wider than ever ($77,998 government versus $63,800).
Every age group has seen a decline in income—except the elderly. Those between the ages of 65 and 75 saw an average 6.5% gain in income, though most are not working and collect Medicare and Social Security.
The last time incomes fell this fast was during the late 1970s under Jimmy Carter, and it’s no coincidence that economic policies then and now are so similar. If Mr. Obama succeeds in convincing voters that he really is the tribune of the middle class, it will be the political conjurer’s trick of the century.
“When you add up his policies, this president has increased the national debt by five trillion dollars.”
— Mitt Romney, in Des Moines, May 15, 2012
Who’s to blame for the national debt? In a speech in Iowa, the former Massachusetts governor on Tuesday pointed the finger at President Obama’s policies, naming in particular the 2009 stimulus (worth about $800 billion) and the health-care law, which has mostly not yet kicked in (and according to the Congressional Budget Office will not add to the deficit in its first 10 years).
The national debt is simply a matter of numbers, but the blame game is much more complicated. Let’s take a look.
The Treasury Department’s “Debt to the Penny” Web site makes it easy to track the growth of the national debt during Obama’s presidency. There are two key figures — for publicly held debt and for gross debt, which includes bonds that the government owes to itself (such as Social Security trust fund bonds.)
As of Jan. 20, 2009, the publicly held debt was $6.31 trillion and the gross debt was $10.63 trillion. As of May 14, 2012, the publicly held debt was $10.92 trillion and the gross debt was $15.68 trillion.
So, the publicly held debt has grown by $4.61 trillion, and the gross debt has grown by $5.05 trillion. Thus it’s certainly correct that the national debt has grown by about $5 trillion under Obama.
Eric Fehrnstrom, a senior adviser to the Romney campaign, said that the $5 trillion figure came from these Treasury Department figures.
“We’re using the same standard that Obama used during his campaign in assigning blame to President Bush for the increase in debt that happened under his watch,” he said, pointing to a speech that then-Sen. Obama made during the 2008 presidential campaign.
“The problem is that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents,” Obama said in Fargo, N.D. “Number 43 added $4 trillion by his lonesome, so that we now have over $9 trillion of debt that we are going to have to pay back — $30,000 for every man, woman and child. That’s irresponsible. It’s unpatriotic.”
Hmm, “unpatriotic” is certainly harsh. But, we’ve often said, two wrongs don’t make a right.
Romney also attributed the growth of the debt entirely to Obama’s policies. And, and while the numbers add up, that is a bit more difficult to justify.
First of all, Obama has failed to convince Congress to enact some of his proposed policies — such as higher taxes on the wealthy — that likely would have reduced the deficit and thus kept the debt growing more slowly.
But more to the point, a major factor in the debt explosion has been the decline in government revenues because of the recession. One could argue — and Romney might — that the laggard recovery is the result of Obama’s policies and thus he should also get all of the blame for the decline in revenues. But the chart below shows that the decline in revenues (the red line) began at start of the recession — a year before Obama took office.
The chart also shows an explosion of spending (blue line) began at the start of the recession — that is the result of automatic stabilizers such as unemployment insurance kicking in. The spending kept going up, and a good chunk of that is Obama’s responsibility. Still, as the chart shows, it is not such a simple answer to pin this all on Obama’s “policies.”
(Click on the chart to get a larger image)
“While it’s true that revenue has decreased by a small amount, spending has soared — and it’s the role of a president to set a budget that ensures that spending stays in line with available revenue,” Fehrnstrom said. “President Obama has both increased non-defense discretionary spending and failed to propose any serious reforms to entitlement spending.” He noted that non-defense discretionary spending — annually appropriated by Congress — has increased significantly under Obama.
For readers wondering about the impact of the George W. Bush tax cuts on the national debt, the chart also shows slack revenue for a number of years after the recession at the start of Bush’s presidency, which is after the passage of the 2001 and 2003 tax cuts. There’s also a steady increase in spending under Bush.
While blame is often placed on the Bush tax cuts, the burst of spending under Bush is an often forgotten factor in the disappearance of the projected budget surplus. We have previously shown that this is how it breaks down from 2001 to 2011:
Increased spending (discretionary and mandatory): $4.3 trillion (36.5 percent)
Incorrect CBO estimates: $3.3 trillion (28 percent)
Tax cuts: $2.8 trillion (24 percent)
Higher interest costs: $1.4 trillion (12 percent)
The Pinocchio Test
Obama is the president, so he has ownership of the $5 trillion increase of the national debt during his years in office. He certainly tried to pin the increase of $4 trillion — over eight years — on George W. Bush.
But that wasn’t quite right then, and it is equally simplistic for Romney to attribute all of this increase in the debt in the past three years to “Obama’s policies,” especially when he speaks of adding them up. We would have given Obama a Pinocchio back in 2008, and we are giving one to Romney now.
Full story HERE.
From the NYT: Doing the Math on the Obama Deficit
The campaign trail can be a lonely place, so Mitt Romney frequently invites friends to accompany him. New Jersey Gov. Chris Christie is an occasional companion. So is Virginia Gov. Bob McDonnell. But more often, Romney brings a large clock.
Romney’s people made it themselves. It has two giant flat-screen televisions pushed side by side. It’s surrounded by a green foam sign. And it’s hooked to two computers feeding it a live count of America’s rising debt burden, which stands well above $15 trillion. The clock represents President Obama’s economic failures. It’s there so Romney can point to it and tell the crowd that if he’s elected, he’ll “do a better job slowing down that clock.” But if you’re a deficit-obsessed voter, the clock doesn’t answer the key question: How much has Obama added to the debt, anyway?
There are two answers: more than $4 trillion, or about $983 billion. The first answer is simple and wrong. The second answer is more complicated but a lot closer to being right.
When Obama took office, the national debt was about $10.5 trillion. Today, it’s about $15.2 trillion. Simple subtraction gets you the answer preferred by most of Obama’s opponents: $4.7 trillion.
But ask yourself: Which of Obama’s policies added $4.7 trillion to the debt? The stimulus? That was just a bit more than $800 billion. TARP? That passed under George W. Bush, and most of it has been repaid.
There is a way to tally the effects Obama has had on the deficit. Look at every piece of legislation he has signed into law. Every time Congress passes a bill, either the Congressional Budget Office or the Joint Committee on Taxation estimates the effect it will have on the budget over the next 10 years. And then they continue to estimate changes to those bills. If you know how to read their numbers, you can come up with an estimate that zeros in on the laws Obama has had a hand in.
The Center on Budget and Policy Priorities was kind enough to help me come up with a comprehensive estimate of Obama’s effect on the deficit. As it explained to me, it’s harder than it sounds.
Obama, for instance, is clearly responsible for the stimulus. The health-care law, too.
When Obama entered office, the Bush tax cuts were already in place and two wars were ongoing. Is it fair to blame Obama for war costs four months after he was inaugurated, or tax collections 10 days after he took office?
So the center built a baseline that includes everything that predated Obama and everything we knew about the path of the economy and the actual trajectory of spending through August 2011. Deviations from the baseline represent decisions made by the Obama administration. Then we measured the projected cost of Obama’s policies.
In two instances, this made Obama’s policies look more costly. First, both Democrats and Republicans tend to think the scheduled expiration of the Bush tax cuts is a quirky budget technicality, and their full extension should be assumed. In that case, voting for their extension looks costless, and they cannot be blamed for the resulting increase in deficits. I consider that a dodge, and so I added Obama’s decision to extend the Bush tax cuts for two years — at a total cost of $620 billion — to his total. If Obama follows through on his promise to extend all the cuts for income under $250,000 in 2013, it will add trillions more to the deficit.
The other judgment call was when to end the analysis. After 10 years? After the first term? We chose 2017, the end of a hypothetical second term. Those are the years Obama might be blamed for, so they seemed like the ones to watch. But Obama’s spending is frontloaded, and his savings are backloaded. The stimulus bill, for instance, is mostly finished. But the Budget Control Act is expected to save $2.1 trillion over the next 10 years. The health-care law is expected to save more than a trillion dollars in its second decade. If our numbers were extended further, the analysis would have reflected more of Obama’s planned deficit reduction.
There’s also the issue of who deserves credit for what. In this analysis, anything Obama signed is attributed to Obama. But reality is more complicated. The $2.1 trillion debt-ceiling deal wouldn’t have happened without the Republicans. But a larger deficit-reduction deal — one including tax increases and spending cuts — might have.
In total, the policies Obama has signed into law can be expected to add almost a trillion dollars to deficits. But behind that total are policies that point in very different directions. The stimulus, for instance, cost more than $800 billion. So did the 2010 tax deal, which included more than $600 billion to extend the Bush tax cuts for two years, and hundreds of billions more in unemployment insurance and the payroll tax cut. Obama’s first budget increased domestic discretionary spending by quite a bit, but more recent legislation has cut it substantially. On the other hand, the Budget Control Act — the legislation that resolved August’s debt-ceiling standoff — saves more than $1 trillion. And the health-care reform law saves more than $100 billion.
For comparison’s sake, using the same method, beginning in 2001 and ending in 2009, George W. Bush added more than $5 trillion to the deficit.
What is often assumed in this conversation is that all deficit spending is equal and all of it is bad. That’s not the case. Deficit spending when the economy is growing is different from deficit spending when the economy is in crisis.
Nor is all deficit reduction alike. Sometimes, cutting the deficit will expand the economy. Sometimes, cutting the deficit will shrink the economy. Which brings up some other questions Romney’s clock can’t answer: What number we should see on it now? And when, and how fast, should it start slowing down?
Over the last three decades, whenever we’ve given in to the temptation to blame the government for all our problems, we’ve lost our commitment to shared prosperity, balanced growth, financial responsibility, and investment in the future. That’s really what got us into trouble. Even before the financial crash, the economy had produced only 2.5 million jobs in the previous seven years and eight months; median family income after inflation was $2,000 lower than it was the day I left office; income in-equality and poverty had increased; and home mortgage foreclosures were exploding. Almost all our economic growth was fueled by home building, consumer spending, and finance, all based on easy credit and heavy leverage. We lost manufacturing jobs every year. Ordinary citizens maxed out their credit cards to keep consumption up as they struggled with flat incomes and rising costs, especially for health care, which increased at three times the rate of inflation.
As the government abandoned balanced budgets in 2001 for big tax cuts and large spending increases, the national debt which had decreased from 49 percent to 33 percent of national income in the 1990s, soared back to 62 percent in 2010. Consumer debt went from 84 percent of average income in the 1990s to a high of 127 percent in 2007. Since the crash, savings have increased a bit, and some debts have been written off, but our citizens’ debt is still at 112 percent of average income.
During the campaign of 2010 and for most of the last thirty years, our political debates have not been about answering those questions. Instead, beginning with President Reagan’s campaign in 1980, we have been told that all America’s problems are caused by government, by taxes that are too high, bureaucracies that are too big, regulations that are too costly and intrusive—if we just had less of all that, free people would solve all their problems on their own.
I believe the only way we can keep the American Dream alive for all Americans and continue to be the world’s leading force for freedom and prosperity, peace and security, is to have both a strong, effective private sector and a strong, effective government that work together to promote an economy of good jobs, rising incomes, increasing exports, and greater energy independence. Our long antigovernment obsession has proved to be remarkably successful politics, but its policy failures have given us an anemic, increasingly unequal economy, with too few jobs and stagnant incomes; put us at a competitive disadvantage compared with other nations, especially in manufacturing and clean energy; and left us a potentially crippling debt burden just as the baby boomers begin to retire.
My argument here isn’t that Democrats are always right and Republicans always wrong. It’s that by jamming all issues into the antigovernment, antitax, antiregulation straitjacket, we hog-tie ourselves and keep ourselves from making necessary changes no matter how much evidence exists to support them.
Back to Work: Why We Need Smart Government for a Strong Economy by Bill Clinton