If you only look at one graph today, let it be this one from economics blogger Keith Hennessey:
I have commented before about the difference between George W. Bush’s deficits — which Barack Obama recently described as a “a decade of spiraling deficits — and Obama’s own actual and projected deficits. The difference is one of magnitude and, as the graph linked above clearly illustrates, one of direction.
With the exception of 2009, every single projected budget deficit in a two-term Obama presidency would be higher than every single actual budget deficit in Bush’s two terms. And even in 2009, Obama managed to take the 8.3 percent deficit he inherited and ratchet it up by another 1.6 percentage points.
As Hennessey explains in his own post:
This graph does not show “a decade of spiraling deficits.” It instead shows eight years of deficits averaging 2.0 percent of GDP, followed by a horrible ninth year as the markets collapsed and the economy plunged into recession. … Even 2008’s bigger deficit than 2007 can be mostly explained by a revenue decline as the economy slipped into recession pre-crash. Before the crash of late 2008 President Bush’s budget deficits were 0.6 percentage points smaller than the historic average. Deficits did not “spiral” during the Bush presidency or the decade. The bumped around the historic average, then spiked up in the last year.
Yeah, but what about that horrible 8.3% in 2009 when President Bush left office? That figure is a combination of a severe decline in federal revenues as the economy tanked, plus the projected costs of TARP for fiscal year 2009. If we include that terrible ninth year in the Bush average (as we should), then the average Bush deficit is still only 2.7%, one tenth of a percentage point above the average over the past four decades. (All data are from CBO’s [the Congressional Budget Office's] historic tables.)
Yes, that last year sucked. Yes, when President Obama took office he faced an enormous projected budget deficit for his first year in office (which jumped from 8.3% when President Bush left in January to 9.9% at the end of that fiscal year). But it is inaccurate and misleading to characterize the previous decade as “a decade of spiraling deficits.”
Which exactly is the decade of spiraling deficits? The last one, or the one we’re beginning now?
* Bush average: 2.7% (including the 8.3% for FY 2009 when President Bush left office in January);
* Obama average (projected for two terms spanning nine fiscal years): 6.35%
Hennessey uses the historical budget-deficit average from 1970 onward, which is 2.6 percent of gross domestic product. If you go back further, to 1960, the average falls slightly to 2.3 percent of GDP, according to this Wall Street Journal op-ed (which also explains why Bush’s tax cuts were responsible for such a small portion of the budget deficits during his administration).
If you want to know why Hennessey counts nine budgets for a two-term presidency, you can read the full explanation here. (The short answer is that fiscal years don’t overlap neatly with presidential years, and thus a two-term president has seven budgets completely during his administration, as well as having a hand in both the budget when he takes office and the budget when he leaves office.)