Saturday, October 01, 2011

MANY OF YOU have probably seen this chart purportedly showing how bad Republican presidents are and how good Democrat presidents are -- particularly Obama -- at controlling the growth of public debt:

There's just one problem: it's as false a Michael Moore's slimming diet. I'll give word to the Washington Post:
The chart has some basic conceptual flaws. For instance, as the debt keeps getting higher, the possible percentage increases will keep getting smaller. Under the mixed-up logic of this chart, a person can go from 10 to 20, and that would be a 100 percent increase. If the next person goes from 20 to 30, that’s only a 50 percent increase, even though the numerical increase (10) is the same.

The chart also cherry-picks the data that portray Obama in the best light by claiming to show “public debt” but in actuality using the statistics for gross debt.

Gross debt includes intergovernmental transactions such as bonds held by Social Security and Medicare, but public debt is the more commonly used figure of national indebtedness, at least among economists.

If the chart actually used public debt rather than gross debt, it would have put Obama and George W. Bush virtually in the same league — 60 percent increase (as of September 2011) for Obama versus 70 percent for Bush — even though Bush served as president much longer.

But the biggest problem is that this is just dumb math. What really counts is not the raw debt numbers, but the size of the debt as a percentage of the gross domestic product. The GDP is the broadest measure of the national economy and directly indicates the nation’s ability to service its debts. In fact, the White House budget office historical tables portray much of the data as a percentage of GDP, because that is the best way to truly compare such numbers over time.

If the chart were recast to show how much the debt went up as a percentage of GDP, it would look pretty bad for Obama after not even three years in office. In fact, Obama does almost twice as poorly as Reagan — and four times worse than George W. Bush.

    Reagan: plus 14.9 percentage points
    GHW Bush: plus 7.1 percentage points
    Clinton: down 13.4 percentage points
    GW Bush: plus 5.6 percentage points
    Obama: plus 24.6 percentage points