Lil White Lies: Christmas in August

Consistency of standards seems to be the real subject of a Grading PolitiFact review of a PolitiFact Texas ruling on former Texas state representative Paul Sadler, who stated that the federal debt (nearly) doubled when Bush was president.

The Sublime Bloviations Grading PolitiFact series gave both writer (Sue Owen) and editor (W. Gardner Selby) of this PolitiFact Texas ruling his usual “F” grade, yet agreed (was “okay with”)  the Mostly True ruling. This was a case where the 500-pound Gorilla Christmas Tree was clearly comprehended, and that it was useless to nitpick about the ornaments.

Before reading this and finding that out, however, I was ready to make another Christmas connection of Sublime Bloviations’ Bryan White with the Republican Two Santa Claus theory as put forth by Jude Wanniski, and how very, very well George W. Bush played that game with his tax cuts. If you look at the chart below, Bush initiated two wars and the unfunded Medicare prescription drug benefit , yet as a percentage of GDP his spending appears relatively flat until the financial meltdown of 2008.

Instead, White belittled the “way” in which the ruling was written, and inserted his own five “concrete examples” of what was wrong with it.

So, let’s take a look at each of his examples, and see if PolitiFact follows any sort of “standards” and if it deviates from them depending on who it is they’re rating.

1) Evidently none of the figures recognize the temporary nature of the debt resulting from the bailout spending in 2009. That bailout spending accounted for very roughly $441 billion as of June 30, 2009.

Right off the bat, there’s been suggestions that bailout repayments may have been recorded differently, while other PolitiFact rulings appear to indicate otherwise. Assuming it to be $600 billion, that’s a little over 10% of Bush’s deficits. Along with the questionable accounting, we’re still at three fourths of that “nearly double.” But the real question is: does PolitiFact take the bailout pay-backs into account in other fact-checks, or do other fact-checkers figure in the bailouts? A lengthy review by FactCheck.Org indicates it does not take the bank bailouts into account (and in this 2010 review as well). PolitiFact rulings about (statements concerning) Bush’s debt by Obama supporters  Rahm Emmanuel and Dick Durbin do not take this into account. A briefly-lived fact-checker sponsored by NBC News called “Meet The Facts” awarded New Jersey Senator Robert Menendez a “Mostly True”  on a "national debt increasing 72% " statement and does not take the bailout paybacks into account.  Onto Number 2 example:

2) Bush gets about $120 billion in ARRA (stimulus) spending credited to his FY2009 account. ARRA spending and bailouts combined may account for nearly $600 billion in supposed debt. The story omits all of this context.

This is basically a repeat of the first point. Factcheck.Org takes into account the stimulus spending and the auto bailout, but does not address the paybacks. Onto Number 3 Example:

3) Following the above, the inauguration date figures probably provide a better estimate of the debt increase than those from the end of the 2001 and 2009 fiscal years: That estimate comes to a 54 percent increase on the gross debt after adjusting for inflation.

Here, PolitiFact (and other fact-checkers) most often use the inauguration date to measure the increase, but they do not account for inflation. In the Rahm Emmanuel fact-check mentioned above:

When Bush took office, the national debt was $5.73 trillion. When he left, it was $10.7 trillion. That's a difference of $4.97 trillion, almost $1 trillion more than what Emanuel said.

In the Dick Durbin fact-check, the end of year 2000 to the end of year 2008 was used, which is almost as good:

At the end of calendar year 2000, just before Bush took office, the debt stood at $5.629 trillion. Fast-forward eight years -- that is, just before Bush handed the reins to Barack Obama -- and the federal debt stood at $9.986 trillion. That's close to double, but it's still about $2 trillion less than what Dubrin said it was.

It would have been more charitable to use the inauguration to inauguration measures in the case of Dick Durbin (which some could call conservative bias!). Either way, it was still close to doubling.

In 2011, Nancy Pelosi promoted a chart saying that Barack Obama has "increased the debt" by 16 percent, compared to George W. Bush, who (she claimed) increased it by 115 percent. Here again, PolitiFact makes no mention of inflation or GDP in awarding Pelosi a Pants on Fire. It simply lists all the presidents and the corresponding raw number increases, and uses inauguration dates.

January 19, 2001 (end of Clinton and beginning of George W. Bush): $5.728 trillion…. Under George W. Bush: Increase of $4.899 trillion, or 86 percent.

In a statement in April by Ohio Representative (Republican) Jim Renacci that “the national debt increased by almost 50 percent” since Obama took office, writer Sabrina Eaton uses neither percent of GDP nor an inflation factor:

According to the U.S. Treasury Department’s website, on Obama’s Jan. 20, 2009 inauguration date, the total outstanding public debt was $10.627 trillion. By the time of Renacci’s April 5 missive, the total outstanding public debt had risen to $15.620 trillion. That’s almost 47 percent higher than it was the day Obama took office, a number that approximates the "almost 50 percent" statistic cited by Renacci.

Glenn Kessler of the Washington Post Factchecker didn't use GDP or inflation when checking a claim about the growth of debt under Obama, stating "it's certainly correct that the national debt has grown by about $5 trillion under Obama."

Finally, even the conservative Weekly Standard reported:

To put that into perspective, when President George W. Bush took office, our national debt was $5.768 trillion. By the time Bush left office, it had nearly doubled, to $10.626 trillion.

In this next example, we get into the difference between (but ignored by White) “public debt” and “gross debt.” The writer of this PolitiFact ruling, Sue Owen, tries to determine which one Sadler was talking about when he said “national debt” (which begs the question, why didn’t she just ask him?) Sadler argues about the inflation adjustment, but an expert consulted, Oregon State University political scientist Robert Sahr, says inflation should be used. While Owen ultimately uses the inflation-adjusted numbers for both types of debt in arriving at her Mostly True conclusion, White (in Example Number 4) presents us with his own calculations based on gross debt, and of course uses the lower (more preferable) measure:

4) PolitiFact's figure for the increase in gross debt after adjusting for inflation represents a 63 percent inflation (34 percentage points) over the more realistic 54 percent figure. PolitiFact proposes grading Sadler "Mostly True" for a figure that, by PolitiFact's accounting, was exaggerated only by as much as 43 percent. Sadler appears more accurate than PolitiFact.

In his last example White talks up the GDP measure:

5) PolitiFact omits a great deal of information regarding the precipitous climb in spending for 2009, much of it owing to the bailout programs, and apparently never considers the debt as a percentage of GDP, perhaps the method most favored by economists in measuring the growth of debt.

To support this, he follows with links to three PolitiFact rulings where the GDP measure was used, but all three of them pertained to tax increases, not debt. If he could link to statements about debt where PolitiFact used the GDP measure, I would be inclined to agree with his point. In this 2011 ruling, PolitiFact quotes an expert source as to when such a measure might be used with debt:

Still, as Gerald Lynch, a professor of economics at Purdue University, noted in an email, "If the congressman wanted to say we were racking up debt then at a rate twice what we are today, then that would be ok to refer to the deficit to gdp ratio. To say that we were in twice as much debt is not correct."

In other words, there has to something that shows the rate of debt accumulation, not so much the amount. In 2010, PolitiFact awarded a Mostly True to a statement by George W. Bush “defending his fiscal record” using the rate of debt. But Bush was very specific in his statement: "My debt to GDP was the lowest or one of the lowest of modern presidents. My taxes to GDP was the lowest and my spending to GDP was too.”

In this ruling on Obama, he states (in a jab at Romney) that the amount of debt “per capita” in Massachusetts is higher than any other state. PolitiFact found that although it was close to literally True, it took things out of context, so gave it a Half True:

…Finally, much of the debt was actually initiated under the policies of prior governors and legislatures, and experts say that there was not much Romney could have done unilaterally to dramatically change the debt trajectory, particularly given a strong Democratic majority in the Legislature that regularly overrode his vetoes. The claim leaves out important details or takes things out of context, our definition of Half True.

But that’s per capita, not “a percent of GDP,” and percent of GDP is where we want to determine if PolitiFact is consistent. Preferably, we need to find a statement referencing “taxes in history” especially if was a positive ruling on a Republican. Recently Virginia Representative Gerry Connolly got rated True for a statement about Ronald Reagan: he "raised taxes in 1982, 1984, 1985, 1986 and 1987”—

When Reagan took office in 1981, federal taxes were 19.6 percent of GDP, the highest level since World War II. That figure dropped to 17.3 percent during his first term and rose to 18.2 percent at the end of his second term. For comparison, federal tax revenues for this fiscal year are estimated at 15.8 percent of GDP.

Or this ruling on New Hampshire congressman Charles Bass who called the expiration of the Bush tax cuts the largest tax increase in history:

Yet, according to the treasury department analysis, the Bush tax cuts fall well below the Revenue Act of 1942, which is estimated at 5.04 percent of GDP. This would make the Bush tax cuts, should they expire, the second largest tax increase in history, as a percentage of GDP.

In both of these cases where one could say the comparison was apples to apples (taxes-history), PolitiFact used the same measure, percentage of GDP.

White’s over-riding contention is that this ruling “was chosen and executed primarily to aid President Obama in the 2012 election by blaming Bush for a large federal debt.” He certainly needs to get over such conspiratoral thinking. I guess what is agreed to by most experts is that the problem with the debt is not the spending—it is the lack of revenue. The lack of revenue is from the tax cuts. Even half of Obama’s stimulus was tax cuts. This is Jude Wanniski’s dream come true, and White is keeping the distortion alive.

I do have to admit I believe in the Republican-born tax concept called the Laffer Curve—the point in tax rates where an increase lowers revenues, and which a decrease lowers revenues as well. But I take it one point further, when you are below the Laffer Curve, any decrease in tax rates should be deemed an expenditure. In other words, Republicans are spending too, whenever they talk tax cuts. It’s already been proven in the last ten years it does not stimulate the economy—it only stimulates the economy above the curve. Below the curve, it just takes money out of the public sector because the lowered tax revenues forces the fed to borrow. That makes it an expenditure.

It would appear, however, that PolitiFact is fairly consistent with applying standards. I can envision a new PolitiFact writer in training: while I can’t envision the selection bias my conservative counterpart so vehemently embraces, I ‘d venture a bet that one of the first things they do once a statement for fact-check is selected, is to look to see if a similar fact-check was done, and if so, use that previous fact-check as a cross reference. In that way, they should be following the same “standards.”

Grading PolitiFact did not prove its case: it should have cited examples of how “the debt as a percentage of GDP” is “perhaps the method most favored by economists in measuring the growth of debt” preferably through several examples of PolitiFact rulings. It did not consider the “rate” of debt growth. It ignored public debt. It compared the measure it wanted to use for debt growth to tax increases, which is not an apples to apples comparison. This would not have been a Lil White Lie if not for the pseudo-award of “F” with such a weak substantiation as to the reason(s).