By Larry Elder
MSNBC’s “Countdown” show host, Keith Olbermann, recently claimed that today’s “federal budget debt” is “far less than it was throughout the Reagan administration.” He also said it is “about the same as it was in 1970.” Is he right? Tonight’s countdown:
10) What is a “federal budget debt”? No researcher, intern or night security guard told him that there is no such thing? No one fact checked him before he went on-air? Add this to the ever-growing catalog of Olbermann’s greatest hits kept by the indispensable NewsBusters.org.
9) There is a federal (or national) debt . There is an annual federal budget deficit .
8) Let’s assume he meant the “federal debt” — the amount of money the government owes. This number can be stated in dollars. It can also be stated as a percentage of gross domestic product (total value of goods and services we produce in a given year).
It makes more sense to talk about these numbers as a percentage of GDP. Consider two scenarios. Suppose you make 10K per year. You also owe 10K on your credit cards. Now suppose you make 100K per year. But, again, you owe 10K. In the second case, your debt is far less of a big deal because — as a percentage of your earnings — your debt went from 100 percent to 10 percent. Our economy usually grows every year, so stating debt as a percentage gives a better idea of its impact.
Either way — as dollars or a percentage of GDP — Olbermann was wrong about the debt.
At the end of 1988, the final full year of the Reagan presidency, the debt stood at $2.6 trillion. As a percentage of GDP, the debt stood at 52 percent.
Now examine President Barack Obama’s first year in office. It is part former President George W. Bush’s and part President Obama’s. (But as senator, Obama voted for the 2009 budget, which included the TARP bank bailout, since expanded.) In 2009, the debt was over $12 trillion. As a percentage of GDP, the debt was over 83 percent.
Obama’s first-year debt, therefore, is higher than the debt of any Reagan year by far — both in dollars and as a percentage of GDP. And 2010 is projected to continue this upward spiral.
7) Assume Olbermann didn’t mean “federal debt,” but meant “budget deficit” — the annual gap between what the government takes in and what the government spends.
During the Reagan presidency, the year in which he incurred the largest deficit in dollars was 1986.
The deficit was $221 billion. That year, the deficit, as a percentage of GDP, was 5 percent. Reagan’s deficit in 1983 was less in dollars — $207 billion — but it was 6 percent of 1983’s GDP, the highest percentage under his administration.
The 2009 deficit was $1.4 trillion — 9.9 percent of GDP.
Obama’s first-year deficit is higher than the deficit of any Reagan year by far — both in dollars and as a percentage of GDP.
6) Now examine Olbermann’s mind-boggling assertion that Obama’s “federal budget debt” is “about the same as it was in 1970.” In 1970, the deficit was 0.3 percent of GDP, or a total of almost $3 billion. The debt was 37.6 percent of GDP, or $380 billion. Whether compared with today’s deficit or debt, the 1970 numbers were microscopic.
5) Olbermann asserts that “federal budget debt” (assuming we understand what he means) is “a good thing.” Case closed? If a country runs up bills largely to fight a war to protect national security, one could argue that it is a good thing. If a country spends primarily on domestic programs — Social Security, Medicare, Medicaid and/or “stimulus” — one could argue that a “federal budget debt” is a bad thing.
The president of the Federal Reserve Bank of Kansas City, Thomas Hoenig, calls the current and projected deficits “stunning.” He says they run the risk of igniting inflation. He urges a reduction in spending, along with a call to increase revenue. The slippery slope of the housing bailout, he warns, could lead to demand to bail out other weak sectors of our economy. Where will it end, and at what cost to our standard of living and productivity?
4) Suppose Sarah Palin offered a wildly inaccurate take on the “federal budget debt”?
3) Viewers, at least some of them, now falsely believe Obama’s debt and deficit are about the same as Reagan’s. Since vile “right-wingers” love Reagan, they are, goes the argument, committing hypocrisy by complaining about today’s debt and deficit. Olbermann frequently accuses people of lying, something that requires an intention to mislead. Was he lying? Was he just ignorant? Anyone can have a bad show. It doesn’t make him — as he calls others — “the worst person in the world.”
2) How will Olbermann handle this blunder? A retraction? A correction? Ignore it and hope nobody notices because almost nobody watches?
1) Jon Stewart, at least, is funny.