Blaming Obama for George W. Bush’s Policies<quoted text>Now, just answer the post with real numbers.
....Much of the Romney paper is taken up with reviewing the poor economic recovery, which is undeniable. Reading it, however, one is left with the impression that the recession occurred on President Obama’s watch because of policies he is responsible for.
Just to be clear, the National Bureau of Economic Research, the private research group that determines the starting and ending points of recessions, says the latest economic downturn began in December 2007 and ended in June 2009.
The report points to various causes of the recession as if they all just happened without the responsibility of one party or administration. As the report says,“No single party or administration is responsible for structural headwinds to growth.”
That is probably true. But what about cyclical changes in growth and unemployment? These are the ups and downs in the economy that occur around the trend rate of growth, which is determined by structural factors, as the report correctly asserts.
Factors affecting the business cycle are necessarily short-term in nature. They include Federal Reserve policy; international capital flows; industry-specific policies such as those affecting housing; fiscal policy and many others.
Such factors must necessarily have occurred after the previous recession, which ended in November 2001, according to the N.B.E.R. That’s the nature of business-cycle analysis; once a previous recession ends, the cyclical factors that gave rise to it are assumed to have been purged. The next recession will necessarily result from those factors that postdate the previous recession.
So whatever caused the 2007-9 recession had to have resulted from policies that the Bush administration was responsible for – either by initiating them or failing to act against them.
Space prohibits a full discussion of these issues, but certainly one factor had to be the squandering of budget surpluses that resulted from the policies of the Bill Clinton administration and their replacement by huge deficits under President Bush.
Mr. Bush inherited a budget surplus of $236 billion from Mr. Clinton in 2000, which fell to $128 billion in 2001. By 2002, the federal government ran a budget deficit of $158 billion, which rose to $377 billion in 2003, and $413 billion in 2004. The deficit fell to $318 billion in 2005,$248 billion in 2006, and $161 billion in 2007, then shot up to $459 billion in 2008.
It should be noted as well that the fiscal 2009 budget was submitted to Congress by Mr. Bush in January 2008 and took effect on Oct. 1 of that year – almost four months before President Obama took office.
Thus the government was running historically large budget deficits long after the end of the 2001 recession. As I have previously documented, these deficits resulted to a large extent from legislated tax cuts during the Bush years.