The last pre-GFC Bush II year of 2007 had a federal budget deficit of $163B. The budget deficit in 2016, Obama’s last year, was $587B.

The last pre-Covid Trump I year of 2019 had a $984B deficit. After Covid, Biden’s final full year deficit was $1.83T.

There’s a non-zero correlation between any number of policy choices by both parties and the GFC or Covid, but it’s hard to see these primarily as anything but exogenous shocks.

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runako 5 hours ago | parent | next [-]

> last pre-GFC Bush II

> last pre-Covid Trump I

Sure, if you exclude the big increases, you can draw different conclusions.

GFC was not an exogenous shock, and even if it was, a) Bush was in office setting policy the prior 6 years and b) the specific response was not preordained (for ex: it is not part of the Constitution that rich people must pay lower tax rates than they did in 1982, that invariant is a policy choice).

	▲	twoodfin 5 hours ago \| parent [-]
		Sure, but absent the GFC, Bush-era tax rates + spending choices pushed the deficit to a low % of GDP we’d kill for right now. Do you think lower high-income marginal rates caused the GFC?

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jmclnx 6 hours ago | parent | prev [-]

You forget the huge bank bailouts caused by Bush's policies in 2008. That is why it spiked. Obama brought it down during his admin.

Without that spending, the recession of 2008 would have been the same or worse as the depression of the 1930s.

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twoodfin 5 hours ago | parent [-]

This is what I meant by stories you could tell. Other folks blame Glass-Steagall repeal, which happened during the Clinton administration. The Big Short blamed it on the invention of the MBS a couple decades earlier.

IAE, nobody thinks it was a mistake to make a massive fiscal investment in 2008 to avert a depression, as you say. It’s hard to say that is a meaningful signal about the budgetary prudence of the GOP vs. Democrats.

Similarly, if Covid had hit in 2016, it wouldn’t have discredited Obama’s budgetary acumen if he spent a trillion on backstopping the economy against it.

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jmclnx 5 hours ago | parent [-]

I personally blame that repeal, but I an not an economist so I really cannot prove my belief.

I just hope we are not walking into another 2008, I think we are, but again my economic knowledge is just a crystal ball and a magic 8 ball :)

	▲	twoodfin 5 hours ago \| parent [-]
		I wouldn’t worry too much. Imagine if all this capital investment in AI were instead being focused on solar build out. The vibes would be much more positive, but the return on capital for solar panels frankly looks paltry compared to what LLM tokens by the quadrillions can do.