JONATHAN CHAIT AUGUST 25, 2011
Jennifer Rubin has a post, entitled "Obama's Dismal Economy," arguing that the economy is bad, it's Obama's fault, and that Republicans are making the economy better with wise fiscal stewardship:
The Wall Street Journal reports:
"The Congressional Budget Office projected a deficit of almost $1.3 trillion for fiscal 2011. Though that will mark the third straight year of deficits above $1 trillion, the deficit forecast was a slight improvement from the almost $1.4 trillion estimated in an April analysis and reflected higher-than-anticipated revenue from individual income taxes.
The outlook for the U.S. economy also remains challenging, with growth expected to remain too slow this year and next year to make a big dent in the unemployment rate. The jobless rate will fall to 8.9% by the end of calendar 2011 and 8.5% by the end of 2012, the forecast said, as the economy grows by 2.3% this year and 2.7% next year, measured from fourth quarter to fourth quarter."
The good news is that the Republicans’ insistence on some moves toward fiscal discipline have helped. The House Budget Committee explains:
"• Fiscal year 2011 will mark the third straight year with deficits in excess of $1 trillion.
• Over the near term, the debt held by the public continues to increase, equaling roughly three quarters of the economy in 2013.
• Approximately two-thirds of the limited improvement in the baseline fiscal outlook stems from the enactment of the Budget Control Act, which will reduce spending by $2.1 trillion over the next decade.
• CBO locked in its economic forecast in early July before the most recent spate of negative economic news. Still their forecast shows sluggish economic growth — GDP is only expected to increase by 2.4 percent this year and by 2.6 percent in 2012 — and persistently high unemployment over the medium-term.
•Unemployment remains well above 8% into 2014."
Had Obama had his way and gotten a “clean” debt-ceiling increase, we would be in far worse shape with regard to the debt. But the real problem remains the sluggish economy.
The Congressional Budget Office says that the stimulus significantly improved the economy and that spending cuts in the short term decrease growth. Rubin obviously doesn't mention that. Nor does she mention that republicans turned down a budget deal that would have reduced the deficit by significantly more. Rubin genuinely does not appear to detect any tension between assigning all credit for the lower deficit to Republicans and all blame for the state of the economy to Democrats.