10 Reasons Why Conservatives' Fiscal Ideas Are Dangerous

By Sara Robinson, Campaign for America's Future. Posted February 27, 2009.

Bill Clinton''s aggressive budget balancing slowed the growth rate a bit: eight years later, he left office with a debt of $5.7 trillion -- and a tight budget in place that, if followed, would have paid whole thing off by 2006. Unfortunately, George W. Bush had no intention of following through with Clinton's plan: on his watch, the debt nearly doubled, from $5.7 to $10.6 trillion. So, nearly 80 percent of the current debt -- about which conservatives now complain -- was acquired on the watch of the three most recent conservative Presidents.

3. $10.6 trillion? But I got this e-mail that says we're looking at a national debt of $56 trillion...

Wow. That's a big, scary number, all right. It's also a perfect example of one of the classic ways people lie with statistics.

This particular mathematical confection was whipped up by Wall Street billionaire and former Nixon Commerce Secretary Pete Peterson, whose Peterson Foundation is the driving force behind the effort to defund Social Security. According to this group, "As of September 30, 2008, the federal government was in a $56 trillion-plus fiscal hole based on the official financial consolidated statements of the U.S. government. This amount is equal to $483,000 per household and $184,000 per American."

This "fact" is only true if you're willing to do a reckless amount of time traveling. The $56 trillion number is what you get if you project the entire U.S. debt a full 75 years into the future, which is how far out you have to go before you can get into numbers that big. In other words: we're not in that hole now -- but we might be in 2084, if we keep going the way we're going now.

Of course, it should be obvious that we're not going to keep going that way -- and that's the other fatal flaw. Peterson's calculations assume that there will be exactly no changes in Social Security and Medicare policy or inputs in the next 75 years -- something that has almost a zero chance of actually happening. Also, there's the usual problem with any kind of long-range projection: even a small error in the calculations at the start will compound over time, creating enormous errors at the end of the range. If he's off by even one percent (which is highly likely), the projection's worthless, even 20 years down the road.

Peterson and his posse are laying bets that Americans are too mathematically and logically challenged to notice the flaws in his reasoning -- even though the holes are big enough to drive an entire generation of retired Boomers through.

4. Whatever. It's still irresponsible to take on that much debt.

Even John McCain's economic adviser thinks this one's wrong. Here's what Mark Zandi said about the U.S. national debt on the February 1 edition of Meet The Press:

It's 40 percent of GDP now. If the projections are right, we get to 60, maybe 70 percent of GDP, which is high, but it's manageable in our historic -- in our history we've been higher, as you pointed out. And moreover, it's very consistent with other countries and their debt loads. And more -- just as important, investors understand this. They know this and they're still buying our debt and interest rates are still very, very low. So we need to take this opportunity and be very aggressive and use the resources that we have at our disposal.

To repeat: Debt is never a good thing; but history is on our side here. We've carried a lot more debt than this in the past; and so have other fiscally responsible countries. And the world's investors are still flocking to buy U.S. bonds -- even though with inflation, they're getting slightly negative interest rates, which means they're effectively paying us to use their money. If they have that much faith in our economy, we're probably not wrong to have a little faith in ourselves. By world standards, we're still looking like a very good bet.

5. But Social Security is headed for disaster. It's out of control!

It's a testament to the short attention spans of the media that the cons try to launch this talking point every six months or so -- and every damned time, the punditocracy goes running flat-out after the bait, fur flying, like an eager but not particularly bright Irish Setter. And then people like us need to collar them, make them sit, scratch their ears, and calmly explain all over again (as if it were brand-new information) that Social Security is in perfectly fine shape, and the conservatives are making much ado about nothing -- again.

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Sara Robinson is a Fellow at the Campaign for America's Future, and a consulting partner with the Cognitive Policy Works in Seattle. One of the few trained social futurists in North America, she has blogged on authoritarian and extremist movements at Orcinus since 2006, and is a founding member of Group News Blog.

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