Sunday, October 9, 2011

A bogus chart on Obama and the debt gets a new lease on life - The Fact Checker - The Washington Post

A bogus chart on Obama and the debt gets a new lease on life - The Fact Checker - The Washington Post

Posted at 06:00 AM ET, 09/29/2011

A bogus chart on Obama and the debt gets a new lease on life

“Who Increased the Debt? President Reagan 189%. President GHW Bush 55%. President Clinton 37%. President GW Bush 115%. President Obama 16%.”

— Data on a chart floating around the Web this week (an older version of the chart above)

There’s a saying attributed to Winston Churchill that goes something like this: "A lie gets halfway around the world before the truth has a chance to get its pants on."

Try as we might at The Fact Checker, we find that no matter how many times we clearly identify an untruth — such as a ridiculous e-mail on Obama’s health-care plan — it still keeps popping up, months later.

So imagine our surprise when we found in our Facebook feed this week a chart, purporting to show how Republican presidents — Ronald Reagan, George H.W. Bush and George W. Bush — had increased the debt by a significantly greater percentage than either Bill Clinton or President Obama. Pretty impressive chart, “liked” by at least 7,000 people on a posting by the liberal group

But this chart, originally created by the office of House Minority Leader Nancy Pelosi, is as phony as a three-dollar bill. Our friends at PolitiFact did a pretty thorough takedown of it in May, giving it their worst rating: “pants on fire.” They even caught the Pelosi people in a bad mathematical error, based on the fact that the Democrats calculated the numbers as if Obama took office a year later than he did.

That error greatly reduced Obama’s supposed percentage increase (from 35 percent to 16 percent) and boosted George W. Bush’s increase (from 86 percent to 115 percent). Pelosi’s office corrected the math error after it was spotted by PolitiFact, but amazingly, the chart that turned up in several places in our Facebook feed was the old chart.

But even with the corrected number, this is still a Four-Pinocchio whopper. Let’s explain why.

The Facts

The person who posted this on Facebook noted: “From the US Treasury Dept — any questions?” But it actually is not a Treasury Department calculation, just manipulated data taken from the Treasury Web site.

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

(Note: We derived most of these data from table 7.1 of the budget office historical tables, which gives end-of-fiscal year figures, so they do not quite match up to presidential terms. Obama’s figures are based on the GDP: public debt ratio as of June 30, 2011)

One can offer reasons for why Obama’s performance appears so poor, including the fact that he is battling a recession. An improvement in the nation’s economy would boost the gross domestic product, which would certainly begin to reduce his ratio. But the fact remains that under basic economic measures, not phony ones, his record on the growth of the national debt is the worst of recent presidents. (We make that statement using the logic of Pelosi’s office, which pins all of the growth of the debt on individual presidents. In reality, many factors, including the economy, wars and congressional actions, contribute to the rise of the debt.)

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