Sunday, January 21, 2018

US Debt Bomb I: Populism Fuels Partisan Spending out of control


When Senator Daniel P. Moinyhan famously said that "everybody is entitled to his own opinion but not to his own facts" nobody imagined that 40 years later someone will come back with "alternative facts".

I plan to post regularly facts that may or may not please those on one or another partisan position -there are many parties to each set of facts- but I hope will help keep discussions honest and conclusions closer to reality.

It's a tall order for a time in which we as a society live in almost parallel universes divided by invisible gerrymandered lines, that keep voters homogeneous and congresspeople glued to their seats. That old practice has been refined and compounded since the inception of cable TV newscasts and later, partisan websites, which create "echo chambers" that repeat party lines at a set of 3 or 4 daily "news cycles" brainwashing, rinsing and repeating willing viewers with the partisan talking points decided by partisan campaign managers and their press agents. All of this, financed by billions of dollars of media moguls turned into kingmakers.

Such activity requires as well a constant dissing of expertise as "elitism" and replace facts with conspiracy theories and urban legends. 




Partisanship has infected all areas of public life to an almost comic level: universities create "safe zones" to protect college students from the "microagressions" of unacceptable opinions and facts.

Both "Left" and "Right" partisans pick or drop friends, family, clubs, associations, careers, colleges and even jobs based increasingly on partisan politics.

The 2016 election and its aftermath -the first year of Trump's unexpected and dysfunctional presidency- brought the war on facts to a new level of virulence.

First fact-check: "Obama grew the national debt more than all previous presidents together"

Well, although Math can be used creatively, this is too much even for that. Thanks to the useless "debt ceilings" we have a long time-series of national debt from 1981 to 2014:





As we can see, it's awful and dangerous -we are in the 19 trillion level with a new round of tax cuts- and ignores the Bowles-Simpson bipartisan commission recommendations almost to detail -as senator Simpson forecasted-



Obama received a 11 trillion debt from George W Bush in 2008 (together with the Great Recession 2008-2011) and left a 19 trillion -a 68 percent increase) to Donald Trump.

Obama didn't increase the debt more than all his predecessors together, but did increase the debt in dollar terms more than his immediate predecessor: 7. 9 trillion against 5.8 trillion generated by George W Bush -who had the title of "biggest spender" in dollar terms before him. (more details)

In relative terms, however, George W Bush rose the remaining debt he received from Clinton (who made a surplus in his last years) more than 100 % against 68 % for Obama. 

Second Fact-check: Clinton left a surplus to Bush and he turned into debt



Clinton's surplus expected for 2001 never materialized because they were mostly used to finance new spending -tax cuts and wars-. 




There was a huge overestimation of the surplus (estimates of the surplus 27 % were over what it turned to be) but what came in went out in those two ways almost immediately:

Wars and tax cuts combined with Fanny and Freddie real estate debt amounted to almost 70 percent of new public debt by 2019.



So, that second fact is correct, but omits the real estate bubble (Fannie, Freddie and TARP) that remains a bipartisan responsibility.  


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