More on causality and the national debt
As I pointed out in this post and this one, growth in the national debt can only be fairly evaluated by assigning causality to the different contributors to that debt. Simple-minded comparisons of debt when a president came into office with current day debt will be misleading if previous occupants of the office implemented policies that continue into the next administration.
I recently discovered that the New York Times and the Washington Post have conducted analysis of the contributors to debt based on the policies of the Bush and Obama administrations, and the bottom line is about the same in each case. President Bush’s policies increased the debt by about $5 trillion (T) from 2001 to 2009, while President Obama’s policies increased the debt by $1 to 1.4T. By attributing debt to specific policies, these two analyses exclude debt attributable to previous administrations, so the comparison is a consistent one.
These analyses don’t seem to include explicit treatment of the effect of the Great Recession on costs and revenues, which is something worth exploring (for one such analysis, see this graph via Paul Krugman). They also aren’t explicit about how they treat inflation and the time value of money, both of which make money spent in earlier years more valuable than money spent in later years. Someone evaluating these numbers would need to understand how those two effects were treated to use the data in other comparisons. In any case, correcting for those two effects would tend to make President Bush’s relative contribution to debt even larger if they are not currently included in these comparisons.
