September 19, 2004
How to Lie with Economic Statistics
How to Lie With Economic Statistics
The Bush people have a new "policy memo" that purports to show that the economy doesn't look any worse than it did when Clinton ran for re-election in 1996. It will surprise no one that the memo is a pristine example of how to deploy economic statistics to distort and dissemble. I'll spare you a full catalog of the memo's disinformation, but allow me to point out what is perhaps the most egregious case. The memo shows that "debt as a percentage of GDP" dropped from 48.5% in 1996 to 37.5% in 2003.
Those figures are correct (you can find them in a Congressional Budget Office report. But as the graph below shows, the drop took place entirely on Bill Clinton's watch, from 1996 to 2001, when we paid down the debt. Under Bush, the debt has shot back up again to pay for tax cuts for millionaires and a senseless war in Iraq. The official projections, assuming Bush's policies stay in place, show the debt exploding to stratospheric highs as the Baby Boomers retire and the tax cuts continue to starve the government of revenue. That means we'll all be paying a heavy Bush Tax for Bush's economic misleadership, long after he and his cronies are gone.
Essentially, then, the memo gives Bush credit for Clinton's success at reducing the debt, when in fact Bush's record of borrow-and-spend has taken us in the other direction!
A more proper measure of a President's fiscal responsibility is the annual deficit, which is the size of the budget shortfall in a given year. In 1996, the deficit was just 1.4 percent of GDP. As a consequence of Clinton's economic program, the shortfall shrunk to almost nothing the next year, and then the budget went into surplus in 1998, 1999, 2000, and 2001. Bush squandered those gains and plunged us back on to a path of unsustainable debt, leading to a deficit in 2003 more than double what it was in 1996.
Posted by Gabriel Braddock at 11:13 PM