Barack Obama is Fiscally Conservative?

I thought I had heard everything, but this is beyond the pale of what anyone should be expected to believe. There is a concerted effort to broadcast the lie that President Barack Obama is fiscally conservative. In fact, it is being purported that he is the most fiscally conservative President in modern times. No, you didn’t misread either of those sentences, but don’t feel lonely if you have trouble believing either of those two statements. To help us get started with this discussion, you probably need to read the original article from The Atlantic. I’ll be the first to tell you I really don’t understand why they have to have fancy charts to tell their story.  Or why they have to focus on “Annualized Growth in Real per Capita Government Spending”. Me thinks they are trying to deflect and distract attention from Obama’s record.

Speaking of his record, let us examine some numbers. Please note that I am not trying to defend the spending policies of George W. Bush. I am fully aware that he was no fiscal conservative, but neither is Barack Obama a fiscally conservative President. When Bush left office, the last deficit he gave us was $438 billion. Obama’s first deficit, at the end of 2009, was $1.4 trillion. You can clearly see the increase. When you look at the rest of the Obama years, you see the deficit going down slightly to $1.293 trillion in 2010 and $1.299 trillion in 2011. The deficit for 2012 is projected to be somewhere around $1.2 trillion. Any way you crunch these numbers, it adds up to more deficit spending. A great deal more, in fact. And the left really expects us to believe Barack Obama is fiscally conservative?

Barack Obama is fiscally conservative?One of the first things they bring up is the Bush years and how the Obama deficit is all because of the policies of his predecessor. Give them just a moment in any discussion pertaining to spending or the federal deficit or debt and they will be quick to mention the Bush tax cuts. The left would like us to believe that were the tax cuts never passed, we wouldn’t be in the fiscal shape we are in today. By proxy, they want us to also believe that ending the tax cuts would automatically fix the problems our country is having. I respectfully disagree.

Bush’s biggest problem wasn’t the fact that he pushed the tax cuts into law, or that Congress went along and designed them to be renewable every year or two. No, his biggest problem wasn’t on the revenue side of the equation, but rather on spending. He failed to cut spending to match the tax cuts. That’s not a failure of the tax cuts, but it does shine the light of day on his habit of spending money. Although some of the events that happened during the Bush presidency were out of his control, ie. 9/11, some were not. The facts clearly show that George W. Bush was not a fiscally conservative President. At the same time, those facts show us that neither is Barack Obama.

Just as Bush increased spending, so has President Obama, but at a greater rate. Couple that with reduced revenues because of the recession and you can see why we have a much greater spending deficit and national debt than we had when Bush was in office. You can blame part of 2009 on the policies left over from the Bush administration, but make no mistake. Saying Barack Obama is fiscally conservative just isn’t true. It is his policies that have allowed the spending deficit to continue to grow. The national debt is sitting at well over $15 trillion and much of it is the direct result of the tax and spend policies of Barack Obama. And this is before the monstrous costs of Obamacare is fully on the federal books. Who knows what the results will be of that?

I want to reiterate one point in my closing remarks. One of the main arguments I have seen in favor of the idea that Barack Obama is fiscally conservative is the theory that the Bush tax cuts and the recession are to blame for the increases in the federal deficit and national debt we are currently seeing. While it is true that they hold part of the blame, let us make no mistake. What does any sane person do when their personal or business revenues decline? They reduce the amount of money they are spending. What did Barack Obama do when revenues declined because of the recession? He increased spending. What did Barack Obama do when faced with the reality of lower tax revenues because of the Bush tax cuts? He still increased spending and has continued to rant and rave about how the rich are not paying their fair share. That’s why I will always see him as a tax and spend President.

So, tell me again how President Barack Obama is fiscally conservative?

About LD Jackson

LD Jackson has written 2038 posts in this blog.

Founder and author of the political and news commentary blog Political Realities. I have always loved to write, but never have I felt my writing was more important than in this present day. If I have changed one mind or impressed one American about the direction our country is headed, then I will consider my endeavors a success. I take the tag line on this blog very seriously. Above all else, in search of the truth.

28 comments to Barack Obama is Fiscally Conservative?

  • Mike

    I certainly won’t argue with your basic premise Larry — Obama is not a fiscal conservative. But I do want to note an important point that I think you misprepresent when you say “When Bush left office, the last deficit he gave us was $438 billion. Obama’s first deficit, at the end of 2009, was $1.4 trillion. You can clearly see the increase.” Before Obama even took office the CBO projected deficit for 2009 was $1.2 billion with $1 billion deficits projected for the next few years. Add on to that Obama’s stimulus spending and you’ve accounted for the bulk of the budget deficits for the past few years. That’s the argument for his “conservatism”. I’m not buying that label either but for reasons that differ from you. I don’t think his spending is as reckless as conservatives make it out to be; but if he had any wiggle room at all he’d be spending like a sailor (no offense Navy!). He can’t so he isn’t but he would if he could. That’s the difference between a real fiscal conservative and Obama.

    • I’ll give you that his first deficit is partially Bush’s fault. The other three years, soon to be four? Not so much. He has done nothing except increase spending, no matter how you calculate the numbers.

  • Consider the source. Derek Thompson is a leftist punk. He thinks Paul Ryan’s budget will money bomb us back to the stone age, i.e., the 1950’s. If that happens, woe is us! How could Americans survive without government health care and unemployment checks? He’s an intellectual lightweight, as the quote below demonstrates:

    “In order to pretend that the U.S. government can wear its 1950s-era girdle, you have no choice but to either dismantle government-paid health care, or else cut the rest of government with such draconian verve that we’re forced to let our highways rot, while the unemployed go bankrupt and our veterans go homeless.”
    http://www.theatlantic.com/business/archive/2012/03/the-worst-part-of-paul-ryans-budget/254845/

    • It’s pretty clear that he likes to throw around a lot of big words, but knows next to nothing about fiscal conservatism. I fully suspect he has not met a government program he doesn’t like. People like him are one of the reasons why our country is in the shape it is in right now. They want to depend on the government for everything.

  • Obama’s flying monkeys in the press will be marching out a veritable parade of such brazen absurdities as the campaign season heats up. This is just a timid early salvo.

  • The world’s three greatest lies? “The check’s in the mail”; “I’ll call you in the morning”; “Obama’s new plan is investment, not spending, that will reduce the deficit”!

    The increase in the deficit under Obama is not the carry over from Bush, but rather the massive pork-entitlements of the “Stimulus” and “Health Care” bills, combined with lower tax revenue due to bludgeoning the business community to death (oh, and did I mention subsidizing losers such as Solyndra, methanol, wind, algae etc etc etc).

    God. HELP us! Can’t wait ’till November.

    • To be sure, Obama has let up on the “spending” rhetoric. He rarely calls it that anymore, preferring the term “investment”. He keeps saying he is going to cut the deficit in half, or some other arbitrary percentage, but it keeps going up. I wonder what his definition of “cut” is?

  • I am mot defending Bush. He approved and spent the TARP monies. However, Obama was the beneficiary of TARP being paid back. Otherwise his deficits would be even greater.

    • John Galt

      Jim, TARP was a success. Conservatives are making the mistake of blanketing all government programs as bad, regardless of circumstances and particular conditions at the time of execution.

      I agree that “most” government interventions are bad. I don’t agree that “all” are bad. We criticize the Patriot Act because 10 years of an event erase a lot of memories. We also tend to forget the conditions in place when the TARP program was implemented. But TARP has been paid back and it did help to stop the deterioration of conditions in 2008, mainly affecting “Main Street” more than “Wall Street”.

      Now, if you want to attack the “Stimulus Bill” of 2009, I’m all with you.

      • I suppose I might just have to disagree with you that TARP was a success. I’m not so sure the government should be in the business of bailouts in the first place, much less being able to determine which companies are bailed out and which companies are allowed to go bankrupt.

        • John Galt

          It easier ‘said’ than’ lived’.

          LD, You are mixing two heterogeneous concepts; the moral and the material success. When I say it was a success it is because the capital invested was returned, in some cases with a dollar profit and in all cases with a change of fundamentals on the deteriorating elements that were taking the innocent with the guilty. The morality of it, which is what you are focusing on, is disputable, and though in most cases I would agree with you, the key is in the word “most”, for in economics, as in life, we should never say never.

  • I want to point out the problems of budget deficit numbers. In 2008, Bush’s last full year in office, you are correct that the reported budget deficit was $438b. But we issued $768b in debt. That’s the “real” deficit, and $330b isn’t chump change.

    But Obama s fiscally conservative? He has admitted we have a deficit problem, and his Treasury Secretary has admitted that they have no solution.

    • Maybe I am incorrect in the way I look at these numbers. I differentiate between the yearly spending deficit and the overall national debt. Am I wrong to look at it that way?

    • John Galt

      This is relevant to the above, but it is also a direct response to the comment left at my piece “The Truth of Bush vs. Obama Budget Deficits”.

      Like I pointed out, CT, the chart shows very clearly that Bush managed to lower the budget deficits from 2004 to 2007 in spite of increasing spending. The marked spending for 2008 was already in special financial crisis mode, but it was programmed for only a 100 billion increased, to 2.9 trillion as you pointed out.

      The single entry of the level of spending (as the one you mention isolated) is only relevant when compared to the levels of revenues. That is why the important thing is the bottom line – the relative size of the deficits as compared to the size of the economy. When Bush passed his tax cuts in 2003, Gross-Public-Debt was 77.5% of GDP. By 2007 it was 81.3% of GDP. An increase of 4.9% in 4 years. Bush ended 2008 (crisis year) with a debt of 87.8% of GDP. By 2012 (4 Obama years) the debt is 122.8% of GDP, an increase of 39.8% in four years (2009-2012)(even from the high Bush level of 2008). Saying that Bush “still deserves blame” for the debt crisis of today is misusing the word “deserves” when you assign that blame for a 5% increase in four years versus a 40% in the equivalent Obama period.

      The conclusion is that the economic policy of Bush (tax cuts) was immensely successful under normal circumstances and was the engine of growth.

  • John Galt

    It is good to bring light into the technique of the Administration of repeating a lie until it becomes the truth. You do a good job at that.

    We have to do more than disregard their “blame Bush” techniques and actually expose their lies. But we also have to be careful not to fall into their created Orwellian economic neo-language that establishes certain false premises as true – “He [Bush] failed to cut spending to match the tax cuts”, as you have inadvertently written.

    I cannot do it within the constrains of this “comment” vehicle, but I just posted a piece in my blog that is called “The Truth Of Bush Vs. Obama Deficit Spending”. We created a graph that tells it all (a picture is worth a thousand words). We clarify the economic fallacy of equating tax cuts with spending cuts in order to remain deficit neutral. That is Obamanomics language and that is false.

    If pictures like this (in our post) could find a wide audience, their Orwellian Neo-Language would be neutralized.

    • So, you are saying that spending does not have to be cut when taxes are cut, in order to not add to the budget deficit? I’ll have to go read your post.

      • John Galt

        Right.
        It is exactly the correct assumption and one in which Paul Ryan is basing his new budget proposal in cutting tax marginal rates to 10% and 25%. Mind you, the GBO and Obamanomics does not accept it because they always make a static kinder-garden “present moment” calculation which, of course, begins to get wrong as soon as the clock starts clicking. The more time it passes the more mistaken their results get. Those 10 year estimates that they always make have no chance of being right, and in fact they have never been right in the past, but they keep making them for political purposes.

        The fact that Ryan is also proposing to cut spending is an unrelated aspect of the budget’s tax cuts proposal. In fact, they could actually be in short term conflict but become long term complementary factors.

        In the chart I prepared for the piece “The Truth of Bush Vs. Obama Deficit spending” you would be able to see how the deficit went up the year in which the Bush Tax cuts were passed (2003) but started to go down in the following years in spite of higher spending. I hope that can help.

        It is not surprising that it is one of the most mysterious and misunderstood economic concepts of our time. Friedman, Reagan and Margaret Thatcher understood it, but we don’t have many of those around anymore. Pity!

  • I’m confused about all this talk about TARP being paid back and TARP being a “success.” Last I read, banks were paying back TARP money by borrowing from other government programs. Doesn’t the government still own 70% of AIG plus assorted warrants in other financial institutions, warrants banks are lobbying the government to forgive? Did TARP end the threat of financial collapse or merely delay it? Where does it say in the Constitution that the government can “invest” my tax money propping up the financial sector? How can a government intervention of such magnitude be glibly counted as a “success” in light of the fact that no one really knows if the alternative of doing nothing would have worked out better in the long run?

    As for government interventions per se, it is not “memories” or “circumstances” or “particular conditions at the time” that determine whether the government should or should not intervene in the economy or in the private lives of individual citizens. It is the US Constitution. The better conservatives remember that the better off we will all be.

    • John Galt

      You are right, Sherman, AIG’s TARP money has not been fully paid. They still have a balance due of about 1/4 of the original loans. For all practical purposes AIG is now a government GSE, just like Freddie and Fannie. However, the TARP program has had profits back that compensate for that percentage that has not been paid back.
      Overall, it is considered a success because it stopped the declaration of a “default” action that would have triggered the application of payment over “Default Swaps”.
      It also stopped the further slide of banking share prices that would have triggered capital reserve requirements.

      As to your question whether all would have been alright without it, is something that we will never know.

      The constitutionality of the measure is something that I cannot answer either, and I don’t think there is a sole constitutional lawyer that can do so either without officially asking the nine wise men.

      The TARP was an emergency measure whose money (mostly) has been returned to the people. The “stimulus” bill, and those that followed, however, are just plain lousy economic policy and that money is gone forever.

      • I have heard more than one member of Congress who voted for TARP wonder aloud about its constitutionality and bemoan the fact that although they really didn’t like the idea of TARP, they felt they had to do something. Doing nothing was worse than doing something. There is no doubt that it was uncharted territory for everyone.

    • Personally, I am not convinced TARP was a success. Even putting aside the question of its constitutionality, the precedent it set is a dangerous one. Will it embolden the government to take even more drastic steps to intervene in the next crisis? I’m afraid the answer to that question is probably yes.

  • We’ll have to agree to disagree, John.

    TARP was unconstitutional if for no other reason than that it violated the separation of powers. But even if it’s not unconstitutional, it’s bad economic policy. It’s certainly not free market capitalism. It’s a textbook example of statist, crony capitalism and moral hazard.

    When the government (read, taxpayer) backstops too-big-to-fail financial institutions, and when these financial institutions have an incestuous relationship with those in government (the Wall Street/US Treasury revolving door), these institutions become reckless. They feel bulletproof. They do stupid things and don’t pay the price.

    The first principle of the free market is profit. The second principle is loss. One without the other is a recipe for disaster.

    I would also disagree that the money (mostly) has been “returned to the people.” The money (mostly) has been returned to the Treasury that took it from the people in the first place, and/or competed with the people to borrow it in the capital markets or simply printed it.

    If the government had left the money in the hands of the people, they would have found a better use for it. If the government stayed out of the financial markets altogether and simply coined money, as it is charged to do in the Constitution, the free market would separate the wheat from the chaff and individual Americans would be far, far better off.

  • This is just the beginning Larry. The lies that we will hear over the next few months will be staggering. The only thin more staggering is how many people will fall for them, hook, line, and sinker!

  • The media will now attempt to make Obama look like a fiscally responsible moderate candidate aw we head into the election, and this is only the beginning. Reading what the media will write about Obama we won’t even recognize him when they are through. I hope people don’t fall for his moderate act again.

    • I am hoping they won’t and will be doing everything I can to highlight exactly how dishonest Barack Obama is. I hate to say this about a sitting American President, but I lose more respect for him every day.


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