The Bush Administration: Worse Than You Imagine Possible...

Daniel Gross provides yet another example of how the Bush administration is worse than you imagine possible, even after you take account of the fact that it is worse than you imagine possible:

Daniel Gross: November 27, 2005 - December 03, 2005 Archives: DEBT BE NOT PROUD: This is scary. Allan Hubbard, President Bush's top economic adviser, professes not to know the size of the national debt. From yesterday's White House press briefing.

Q Al, can I ask you one? I can't remember the last time the President spoke about the national debt, which is now over $8 trillion. Is that something you guys worry about?

DIRECTOR HUBBARD: Well, I don't know where your $8 trillion comes from, but we --

Q The public website.

DIRECTOR HUBBARD: Well, I guess it really depends on what you're including, but let me -- again, the President is most concerned about the economy and the budget. And a key component of that, as I have spoken earlier, is the budget deficit. And, you know, that's what contributes to the overall budget debt, the country's debt, and that's why it's so important to reduce the budget deficit and, hopefully, ultimately, eliminate the budget deficit.

Q Does the magnitude of the national debt disturb you?

DIRECTOR HUBBARD: Actually, again, I don't know what numbers you're using, but the current budget debt is not a problem, but we do not want it to grow as a percentage of the GDP. That's the way you want to look at it, is the debt as a percentage of GDP. And our budget debt is lower than many other developed countries. The President is committed to keeping it low; that's why he wants to cut the budget deficit in half by 2009. . . . .

Q Check the Bureau of Public Debt website, you'll see the number there.

DIRECTOR HUBBARD: Okay, thank you.

Is the ignorance here calculating -- i.e. Hubbard really knows what the national debt is but acts like he doesn't because it's embarrassing to talk about? Or is it genuine -- i.e. Hubbard really doesn't have any clue what the national debt is? (I vote for the latter.)

In case, he's still looking, the link is right here. http://www.publicdebt.treas.gov/opd/opdpdodt.htm And the [gross] debt [including money owed by the Treasury to Social Security and other trust funds] is actually now more than $8.1 trillion.

I vote for genuine ignorance as well.

Impeach George W. Bush. Impeach Richard Cheney. Do it now.

Comments

[David]

sounds like he's confusing debt and deficit, despite being given numerous opportunities in the exchange with the press to get his thinking straight. Such persistent conflation is disturbing, I agree.

[bakho]

I think he is following the dictim of answering the question you want to answer, not the question the reporter asks. Bush was just caught lying about his profligate spending. Why don't the GOP fiscal conservatives call Bush out?

[a_liberal]

"Why don't the GOP fiscal conservatives call Bush out?"

Because at the national level, there really aren't any serious ones. You see, the truth about what a political stands for is manifest when it holds undisputed power, which the Rethuglicans do. During Reagan's first term, the public debt passed $1 trillion, and when he signed the bill raising the debt limit above $1 trillion, he announced that the policies that had produced that crushing debt "...have been reversed." Truer words were never spoken. "Borrow and spend Rethuglicans" replaced "Tax and spend Democrats", with the logical and forseeable result that we are now far deeper in debt.

[a_liberal]

"You see, the truth about what a political stands for is manifest when it holds undisputed power, which the Rethuglicans do."

The above should read:
"You see, the truth about what a political party stands for is manifest when it holds undisputed power, which the Rethuglicans do."

My apologies.

[ogmb]

How Hubbard got the job:

http://www.tpj.org/docs/pioneers/pioneers_view.jsp?id=140

[jerry]

I got the impression he was trying to deny the number was that high.

"okay, I don't believe the number you cite, but assuming it is true...."

[Movie Guy]

Brad,

I'm not surprised. Note where he was educated.

I believe that you should use the title for Hubbard that Scott McClellan stated in the White House briefing before turning the briefing over to Hubbard: "National Economic Adviser Al Hubbard"

Or the title that Hubbard stated in an August 9, 2005 White House briefing: "I'm Al Hubbard. I'm the Director of the National Economic Council and Economic Advisor to the President."

Or the title assigned by the President when announcing Hubbard's appointment on January 10, 2005: "Assistant to the President for Economic Policy and Director of the National Economic Council."

And I would be remiss not to rub it in that he worked for Vice President Dan Quayle and is a Harvard graduate: "From 1990 to 1992, Mr. Hubbard was Deputy Chief of Staff to Vice President Dan Quayle. He also served as Executive Director of the President's Council on Competitiveness. Mr. Hubbard received his bachelor's degree from Vanderbilt University, his Master's degree from Harvard School of Business Administration, and his J.D. from Harvard Law School."

Are Harvard undergrads and graduate students introduced to the national debt at all? I have yet to meet one in person who assigns much importance to our national debt.

Recently, I had a Harvard graduate who formed and operates a large U.S. corporation tell me face-to-face that it doesn't matter if the U.S. loses skilled worker positions to foreign interests or if we dump our entire manufacturing base, low to high tech. He said, "The only thing that matters is that we make money. The loss of skills and R&D is immaterial."

Just what the hell are they teaching students at Harvard University these days?!

That Al Hubbard doesn't know the U.S. national debt figure may be the least of our problems...

[Joe A]

I bet Hubbard knows exactly how much the debt is; he just doesn't want to acknowledge intra-governmental debt (ie, that owed to Social Security) as legitimate.

[Andrew]

Keep on rockin' in the first world...

[wkwillis]

Joe A
Why do you think he differentiates between social security held treasury bonds and others? Do you think he acknowledges military pensions as debt? Off balance sheet guarantees such as "moral" obligations like the pension fund agency and the FDIC?
There are many forms of government debts.

[Bruce Webb]

My personal belief is that Right based economists are far more aware of relevant debt figures than Left economists. Mainly because Right economists are much more adept at being artful dodgers around the numbers. They know they don't have them, they are just desparate to keep you from knowing them before they jam their policies (tax cuts and gutting Social Security) through. I got a personal rebuke from our host once. Brad suggested (via e-mail) that a certain prominant privatizer wasn't lying when he posted here, he was just drawing his figure from a totally obscure table in the Social Security Report. And when I checked, son of a gun, sure enough the number was there. But deploying it meant ignoring just about every other number in the Report and omitting the context that the number in question was projected over the infinite horizon. Or in other words akin to fortune telling.

I suspect Professor 'X' fully understood that and consciously decided not to include that fact. Hubbard et al are not particularly interested in playing fair, they are playing to win.

You think people would wise up considering the relation between 'truth' and 'Bush Iraq policy'. Earnest discussions of various economic theories are fine, and holding up the actual facts to the light of day is important, but fundamentally these guys are not playing fair.

"Impeach Bush, impeach him now". And not just for Iraq.

[Robert]

Worry no longer about double-digit trillions of public debt! I am sure the administration will soon arrive upon the charlatan's solution that they should find attractive if not for its pure demagoguery: Just simply redenominate our currency as most peso and lira-based economies have done following their interludes of economic mismanagement. It's quick, easy, and will remove the sickly feeling that accompanies double-digit beer prices, or the wear upon one's clothes of carrying a huge wad of rapidly declining paper to buy a few gallons of gas.

[Robert]

Historically, I've viewed the low (and declining) household savings rate in the USA with consternation, and as a symptom of moral decline that reflects the disappearing values of thrift and prudence. But I am coming around to the more realistic view that the American people are damn smart, and not only is "negative savings" thrifty AND prudent behaviour given the last two and half decades of leadership in Washington, but wholly rational and probably near-optimal, and I am both jealous and poorer for not having emulated it sooner.

[Tim]

How refreshing that in an Administration where practically everything they issue is misinformation or obfuscation that the economics guys are only ignorant. We all know that economics guys would never lie about anything.

[Bruce Webb]

Tim, I don't want to get my hand spanked, but just between you and me I think that Brad goes too far in the direction of professional courtesy sometimes. As does Dean Baker. And perhaps it is a good thing that we have a couple of people above the fray fighting the economic theoretical battles as if the other side was actually sincere in their arguments. But someone has to pay attention to the pile of Bushonomics in the corner and ask the Administration to explain the smell.

I don't vote for "genuine ignorance", I have too much respect for opposition tactics. The Bush Administration is like the Borg, you Assimilate or else.

[Bruce Webb]

Robert is on to something here. In pre-war Weimar Germany the smartest possible economic move was to spend your money the instant you got it, because hyper-inflation was subtracting all value by the minute.

I recently stopped pre-paying my mortgage. A strategy of putting advance money towards a 5% mortgage made sense five or six fed increases ago. In light of current short terms rates it started approaching a free loan to my mortgage lender. If things really drop into the pot Wells Fargo is going to be moving that mortgage to the other side of the books. While I have no plans of moving through the remaining term of the loan. Badda bing!

[BroD]

Damn! My answer would have been the same: "I dunno." Forget all those arcane economic analyses--that's just mind games. I'm ready to participate in economic policy-making at the highest levels.

I guess I should buy me one of those degrees from Harvard first, though. I'll write a dissertation titled, "I Have No Idear." But they might not let me in--dad didn't go there.

Anyway, you're doing a great job, Allie!

[liberal]

Robert wrote, "Historically, I've viewed the low (and declining) household savings rate in the USA with consternation, and as a symptom of moral decline that reflects the disappearing values of thrift and prudence."

While I don't necessarily agree---hey, I'm thrifty myself!---I think a detailed analysis should look at historical trends in household saving, broken down by e.g. income.

My impression is that the bulk of household savings were in the top 20% by income. If so , the question should be focussed on these folks.

Of course, perhaps the bottom 80% used to save roughly 0% and now are saving some negative percentage...plastic...

[Christopher ball]

>Anyway, you're doing a great job, Allie!

The allusion is off. Bush said, "...Brownie, you're doing a heck of a job."

This is like Gore's "I took the initiative in creating the Internet" becoming "invented."

As keep pointing out, "heck of job" can be taken several ways.

[Cal]

My vote is true ignorance. First, Al Hubbard ("AB") is not a professional economist. Heck, AB is not a trained economist. His has an MBA. While he may have taken calculus and a couple of economics classes as an undergrad, he certainly did not receive rigorous training in economics while at Harvard Business School. You need look no further than his boss, President George W. Bush, who is also a Harvard Business School graduate, to know he received no rigourous training in economics while at the Business School. AB is also a law school graduate. Me too. I can tell you that economics has no place in the law school curriculum other than for seminars. However, these seminars do not really discuss economics in any real sophisticated way, they are more interested in window dressing the professor's pet policy arguments. AB is just a political operative filling out the ranks of BushCo.

This is a time when true professional economists and the Academic Community should come out in force to condemn AB's ignorance. The theme should be: "We don't want another Brownie." We don't want BushCo to do to the economy what they already let happen in New Orleans.

[Movie Guy]

Here's the formal mission of the National Economic Council that Al Hubbard serves as the Director:

http://www.whitehouse.gov/nec/

If one conducts a search for links or documents relating to "National Debt" using the White Search engine, here are the results: "Document count: National (8864) Debt (493) National Debt (1)"

One.

But the President has been to the West Virginia facility. This year.

http://www.whitehouse.gov/news/releases/2005/04/20050405-1.html

[Charles]

Anon, that is so misleading that you should consider applying for a position at Treasury.

There are huge transition costs to Social Security. On paper, they may look like a transfer of debt from one entry in the ledger to the other. However, they also have practical consequences on interest rates.

And that's before we get to the performance of real-life privatized pension plans. Britain and Chile have both had disappointing experiences. There's no reason to believe that small investors would do well in the current US market system.

The question asked by the interviewer was specific. The answer was idiotic. The proper answer to whether the magnitude of the debt is too great should include a discussion of what would happen to interest payments should the US be required to increase rates on T-notes by a point or two.

[piotr]

As atrocities of this Administration go, this is ho-hum. It is not like Hubbard stole or mislaid 9 billion dollars, or committed a new series of war crimes.

Actually, is it possible that as percentage of GDP the debt decreased? If you use this metric, nominal GDP increased ca. 7% if not more due to robust inflation we got this year. This would allow to grow the nominal debt, measured at 8 T$ by something like .6 T$. Real interest rate of 10-year Treasuries is currently ca. 1%, a bargain.

The most disturbing issue is that the budget is so wasteful. Even if we can borrow at the very attractive interest rates at the moment, what can we show for the deficit?

It is an interesting to ponder why Hubbard pretends that he is a cretin? One possibility is that it is a bit awkward to elaborate that because we managed to increase inflation while the market did not demand an appropriate compensation, thanks to out Asian friends, we had a good year as far as the growth of relative deficit is concerned (if we did, my numbers are hazy). Another, quite plausible, is that as a faithful servant of the President he is not allowed to appear more intelligent than his boss.

[Slocum]

I would say that including the moneys 'owed' by the government to itself (e.g. the social security trust fund) is misleading, since any 'interest payments' and 'redemptions' of those securities will be entirely at the political disgression of future U.S. goverments (which is not true of other 'real' debt).

Whether you agree or not, certainly, it's *debatable* as to whether it is proper to include that, and it strikes me that that very likely what Hubbard was talking about when he said, "Actually, again, I don't know what numbers you're using".

[RT]

Hey, why can't *I* have a job that pays that well, but tolerates that level of inattention?

Some guys have all the luck.

[Sonsa Rae]

I am just your average, ordinary Accountant who woke up one day to realize that this country is quickly going down the tubes. My question is, who is going to step forward to do something about it? Please, tell me where to go and what to do, what group to join, what "protest" to participate in, whatever. I stumbled across this blog and it's great. I too tried to start one, but didn't really have the time to keep up with it, with work and school and everything else that's going on in my life right now, but I don't think anything is going to change unless we all take the time to make it happen. That's "us" - the "people". Bush just sent out 1.4 million "Holiday" cards and while people are in an uproar about the fact that they didn't say "Christmas", I think this is irrelevant considering the cost of printing and postage for said cards. Excuse me, am I missing something? I always thought that the books must balance and the bottom line is black, not red. ???