Obama's deficits in perspective

Via Mankiw, Stanford economist Michael Boskin:

The CBO baseline cumulative deficit for the Obama 2010-2019 budget is $9.3 trillion. How much additional deficit and debt does Mr. Obama add relative to a do-nothing budget with none of his programs? Mr. Obama's "debt difference" is $4.829 trillion -- i.e., his tax and spending proposals add $4.829 trillion to the CBO do-nothing baseline deficit. The Obama budget also adds $177 billion to the fiscal year 2009 budget. To this must be added the $195 billion of 2009 legislated add-ons (e.g., the stimulus bill) since Mr. Obama's election that were already incorporated in the CBO baseline and the corresponding $1.267 trillion in add-ons for 2010-2019. This brings Mr. Obama's total additional debt to $6.5 trillion, not his claimed $2 trillion reduction. That was mostly a phantom cut from an imagined 10-year continuation of peak Iraq war spending.

The claim to reduce the deficit by half compares this year's immense (mostly inherited) deficit to the projected fiscal year 2013 deficit, the last of his current term. While it is technically correct that the deficit would be less than half this year's engorged level, a do-nothing budget would reduce it by 84%. Compared to do-nothing, Mr. Obama's deficit is more than two and a half times larger in fiscal year 2013. Just his addition to the budget deficit, $459 billion, is bigger than any deficit in the nation's history. And the 2013 deficit is supposed to be after several years of economic recovery, funds are being returned from the financial bailouts, and we are out of Iraq.

Obama's post-recession budgeting is not about stimulating recovery, people, and his administration trying to sell it that way is Rove-style disingenuous.

Nay, as I've pointed out before Obama's is the most progressive budget since LBJ's Great Society, which in my estimation did not work out nearly as well as, say, Reaganomics and Clintonomics.

A little history lesson for some of you: The failures of LBJ's welfare and entitlement programs are what lead many liberals to defect into neoconservatism (note the etymology, "new-conservatives"). The neoconservative movement actually began in the social science halls of academia, from empirical evaluation of the failures of progressive government. This movement culminated with the very successful welfare reform in the 90's.

There was, however, a very unfortunate side effect. Many liberal hawks joined the neoconservative bandwagon, and the Republican Party morphed into the people who brought us an unnecessary and disastrous war and subsequent nation building in Iraq. When dominated by paleocons and libertarians, conservatives used to be against nation building. (Heck George Bush said as much when running, for old time's sake)

Today everyone associates the word "neoconservative" with Bush's disastrous foreign policy, but that is not how it began.  And twisted though it may seem, the historical causality is clear:

Failure of progressive programs -> Need for reform -> Liberals hawks join defection bandwagon -> A tragic war.

There is no reason to think this particular chain of events will repeat itself, but there is plenty of reason to be wary that Obama's progressive budget will be just as counterproductive as it was during the LBJ era as well as in Europe today.

That concerns me quite a bit, but I think we need to keep it in perspective. The only alternative was McCain-Palin and doubling down on the sad failure and corruption of Republican governance during the past 8 years, particularly in foreign policy. I can accept a measure of long-term government inefficiencies, increased debt, nanny statism, and slightly reduced GDP as a price for throwing those bums out.