Question on conservatives and the 2009 federal deficit

[Happy_Lendervedder]

This isn’t meant to be a debate, but if it turns into one, I apologize for plopping it into the wrong forum.

I got into a conversation with a staunch conservative on a facebook post (I actually didn’t mean to debate, I was simply posting a cite and correcting an error.) He bowed out of the conversation by saying “I didn’t mean to get political, but don’t believe everything you read in the news. The federal deficit actually WASN’T over one trillion in 2009.”

Wait-- is this a thing with some conservatives? I understand they have a massive distrust of “mainstream” media, but I have never seen *anything *that disputes the extent of our deficit in 2009.

What I’m looking for is links showing alternative theories around our 2009 deficit NOT being around $1.4 trillion. I can’t find anything in my googling. (Or perhaps this guy I was conversing with is just making things up.)

[OldGuy]

I can’t give you hard facts, but fiscal 2009 ran from October 1 2008-Sep 30 2009. It would therefore be the budget proposed by Bush in June 2008. However the final spending bills on that budget were not passed until March 2009 (and signed into law by Obama)

So the claim may be that the $1.4 trillion deficit was not all Bush fault. And, of course, if we hadn’t had the last spending, we’d not have had so big a deficit so the majority(?) of the deficit is Obama’s fault.

However, it is also my understanding that the budget during the Bush years did not include “emergency” supplemental appropriations for the Iraq/Afghanistan war which totaled something like $500 billion (Total not all in fiscal 2009). These were purposefully kept off the books to make selling the war easier. So the deficit was truly worse than $1.4 tirllion.

[Ravenman]

@OldGuy

However, it is also my understanding that the budget during the Bush years did not include “emergency” supplemental appropriations for the Iraq/Afghanistan war which totaled something like $500 billion (Total not all in fiscal 2009). These were purposefully kept off the books to make selling the war easier. So the deficit was truly worse than $1.4 tirllion.

That’s not right. The deficit is calculated when dollars are expended from the Federal treasury, and has absolutely nothing to do with how the President’s budget proposals are transmitted to Congress.

If the President doesn’t include some kind of emergency spending proposal in the budget that goes to Congress in February, and instead proposes war or disaster funding in June, one could argue that between those two dates, Congress doesn’t have a full picture of proposed spending for the next year. But that has literally zero impact on the deficit, which is tallied on an ongoing basis as dollars are spent, regardless if thy are for the annually budgeted operations of government, entitlements such as Medicare, or for emergency items like a war.

Oh, and for the OP’s question, there is no other number for the deficit in 2009 besides what has been reported. Any argument to the contrary is nonsense. I haven’t heard of Republicans arguing that the deficit was actually lower. It is possible that they think the 2009 stimulus was all counted in the 2009 deficit, which is incorrect. The spending for the stimulus was approved in 2009, but the expenditures occurred over several years as the funds were spent.

[Duckster]

The federal government recorded a total budget deficit of $1.4 trillion in fiscal year 2009, about $960 billion more than the deficit incurred in 2008. The federal deficit rose as a share ofthe nation’s gross domestic product (GDP)from 3.1 percent in 2008 to 9.9 percent in 2009—the highest deficit as a share of GDP since 1945.

Federal spending and receipts diverged dramatically in 2009, reflecting the weakening economy and the federal response. The increase in the deficit of almost 7 percentage points of GDP from 2008 reflected a sharp drop in revenues and a substantial increase in spending.

(Bolding mine.) Source: https://www.cbo.gov/sites/default/files/111th-congress-2009-2010/reports/11-9-09mbr.pdf (PDF warning.) Main page: https://www.cbo.gov/publication/24992

One might argue the Obama Administration had no choice to infuse additional federal dollars to stave off a depression (making things much, much worse).

In other words, if there is a house fire and the current fire captain is incompetent in putting out the fire and preventing it from spreading to neighboring houses, the fire captain who relieves him has no choice but to commit additional resources to avoid a calamity. The added expense is blamed on the second fire captain (it was on his watch). However, had the first fire captain been competent in doing his job, there would have been no need for the second fire caption to commit substantial additional resources.

[lance_strongarm]

Probably the same guy who says there weren’t actually surpluses in the later Clinton years too.

[Alley_Dweller]

You don’t have to trust the lamestream media. The Fox News Channel says it was so. (Note this link is from google’s cache, so it may disappear soon. Copy the page if you want to keep it.)

If your question is just how to prove it to a conservative, that should do it.

Here’s what Newsmax has to say.

[lance_strongarm]

This guy could be referring to debt held by the public vs. intragovernmental holdings. The $1.4 trillion figure combines the two, but debt held by the public is a more accurate figure. It measures money borrowed by the government from outside sources. Intragovernmental holdings is money the government has borrowed from itself by taking cash from one account, such as a “trust fund,” and using it for other purposes. Most media reports will give you the combined number without explaining this. The government calls the combined number the “national debt.”

This is a convenient way to play with the numbers if you want to, by citing only debt held by the public in a year you want it to look low but citing the total national debt in a year you are comparing it to. That might be what your friend is doing, whether he knows it or not.

[Ravenman]

@lance_strongarm

This guy could be referring to debt held by the public vs. intragovernmental holdings. The $1.4 trillion figure combines the two, but debt held by the public is a more accurate figure. It measures money borrowed by the government from outside sources. Intragovernmental holdings is money the government has borrowed from itself by taking cash from one account, such as a “trust fund,” and using it for other purposes. Most media reports will give you the combined number without explaining this. The government calls the combined number the “national debt.”

This is a convenient way to play with the numbers if you want to, by citing only debt held by the public in a year you want it to look low but citing the total national debt in a year you are comparing it to. That might be what your friend is doing, whether he knows it or not.

Well, the OP said the 2009 deficit was at issue, which is a pretty different issue than what you’re talking about.

[lance_strongarm]

@Ravenman

Well, the OP said the 2009 deficit was at issue, which is a pretty different issue than what you’re talking about.

No it’s not.

The deficit is simply debt produced in a given year. The same division between debt held by the public and intragovernmental holdings applies to a given deficit as to the debt as a whole. Perhaps I confused things further by referring to debt rather than the deficit, is that it?

[Ravenman]

You are mixing up two things, probably. There is the unified budget, which includes reporting of deficits, which can be broken up into on-budget and off-budget spending and revenues. The term “public” or “intragovernmental” is never used in relation to on- or off-budget surpluses or deficits, because on the off-budget side it is counterintuitive. (Surpluses lead to debt.)

If the conservative fellow were making the point that off-budget surpluses masked a larger 2009 deficit that Obama could be blamed for, then maybe you’d be on to something. But this conservative guy is arguing the opposite: that the 2009 deficit was smaller than everyone believes.

There is no calculation of on- or off-budget deficits, or the two flavor of debt, than can produce smaller deficits than what was reported in 2009 as the deficit for the unified budget.

[lance_strongarm]

@Ravenman

You are mixing up two things, probably. There is the unified budget, which includes reporting of deficits, which can be broken up into on-budget and off-budget spending and revenues. The term “public” or “intragovernmental” is never used in relation to on- or off-budget surpluses or deficits, because on the off-budget side it is counterintuitive. (Surpluses lead to debt.)

No, you’ve taken things further off course.

Off-budget is a bullshit term. It basically means Social Security, which has a “trust fund” and its own source of revenue so it’s not part of the regular discretionary budget. But it is still counted in calculation of the debt and deficit.

The main source of intragovernmental “loans,” though, has been between the on-budget and off-budget programs.

I don’t know what you’re talking about with the counterintuitive part. All the cash that comes in to the government minus all the cash that goes out in a given year is the surplus or deficit.

If the conservative fellow were making the point that off-budget surpluses masked a larger 2009 deficit that Obama could be blamed for, then maybe you’d be on to something. But this conservative guy is arguing the opposite: that the 2009 deficit was smaller than everyone believes.

No, my theory fits because debt held by the public is always smaller than the total national debt, since it doesn’t include intragovernmental holdings (IOUs between accounts, including between on- and off-budget accounts).

There is no calculation of on- or off-budget deficits, or the two flavor of debt, than can produce smaller deficits than what was reported in 2009 as the deficit for the unified budget.

Sure there is. I looked it up for FY2009 - see link below. However, it appears that intragovernmental holdings, while they went up slightly that year, didn’t go up by much and went down now and then during the year, so maybe that’s not the source of our conservative buddy’s claims in the first place.

http://treasurydirect.gov/NP/debt/search?startMonth=10&startDay=01&startYear=2008&endMonth=09&endDay=30&endYear=2009

[Ravenman]

If off-budget items take more in revenue than outlay in expenditures, the off-budget programs show a surplus. With me so far? If you only look at off-budget items, that surplus ends up increasing intragovernmental debt.

If you expand the aperture to look at the unified budget, off-budget surpluses make each year’s deficit smaller. Right?

So, in 2009, the off-budget surplus made the unified budget deficit smaller. And by smaller, that means the $1.4 trillion deficit on the unified budget that is universally reported.

So this conservative fellow is somehow arguing that the deficit was, in some twist of logic, actually smaller than $1.4 trillion. If you exclude off-budget items (or intragovernmental debt, if you insist, even though literally nobody in government budgeting would view it that way), the deficit would be GREATER than $1.4 trillion, not less than that figure.

Your hypothesis that Social Security/off-budget items/intragovernmental debt somehow leads to a smaller “real” budget deficit in that conservative’s friend’s eyes simply doesn’t add up. That’s because if you exclude those items, the deficit would be $136.9 billion GREATER than the $1.4 billion commonly reported. This is literally the exact opposite of what the OP’s friend is arguing.

(See bottom of page 29 of this link for the math for FY 2009)
https://m.whitehouse.gov/sites/default/files/omb/budget/fy2016/assets/hist.pdf

[lance_strongarm]

@Ravenman

If off-budget items take more in revenue than outlay in expenditures, the off-budget programs show a surplus. With me so far? If you only look at off-budget items, that surplus ends up increasing intragovernmental debt.

If you expand the aperture to look at the unified budget, off-budget surpluses make each year’s deficit smaller. Right?

So, in 2009, the off-budget surplus made the unified budget deficit smaller. And by smaller, that means the $1.4 trillion deficit on the unified budget that is universally reported.

Yes, so far we’re on the same page.

So this conservative fellow is somehow arguing that the deficit was, in some twist of logic, actually smaller than $1.4 trillion. If you exclude off-budget items (or intragovernmental debt, if you insist, even though literally nobody in government budgeting would view it that way), the deficit would be GREATER than $1.4 trillion, not less than that figure.

Your hypothesis that Social Security/off-budget items/intragovernmental debt somehow leads to a smaller “real” budget deficit in that conservative’s friend’s eyes simply doesn’t add up. That’s because if you exclude those items, the deficit would be $136.9 billion GREATER than the $1.4 billion commonly reported. This is literally the exact opposite of what the OP’s friend is arguing.

I see what you mean now. I was saying that perhaps the $1.4 trillion figure already did not include off-budget items and that our conservative friend added them in to make the number smaller. But I hadn’t looked up which was which.

[lance_strongarm]

I should expand on my answer.

Intragovernmental holdings can make the debt look larger, not smaller. It counts the debt the government owes to itself, but NOT the off-setting, equal amount it is owed by itself (hope that makes sense). It really nets to zero.

The reckoning of the surplus/deficit using off-budget accounts, though, does the opposite - it counts current income without counting the offsetting debt.