Don't Know Much About History

Editorial
New York Times

Somewhere between the firing in 2002 of President Bush's first Treasury secretary, Paul O'Neill, and the Senate confirmation this week of his third Treasury chief, Henry Paulson, the administration changed its tune on budget deficits. In the early days, the line was, essentially, that deficits don't matter. Mr. O'Neill's ouster was due in part to his gall in suggesting otherwise. Now, officials dutifully declaim that deficits matter, but that Bush-era shortfalls are "within historical norms."

Mr. Paulson apparently shares that view, having offered it repeatedly when asked about budget deficits during his confirmation hearing. That's a disappointment. It takes a narrow view of history to imply that the Bush-era deficits are "normal."

As a share of the economy, the Bush-era deficits have averaged 2.7 percent. That's the second worst record of any administration in the past 60 years, surpassed only by the deficits from the tenures of President Reagan and the first President Bush, which each averaged 4.3 percent. (Five years into the Clinton era, deficits averaged 1.2 percent of the economy, dropping to a mere 0.1 percent by the time Mr. Bush took over.) To imply that the current budget gap is comfortably within historical norms because it's not as bad as the worst deficits in modern memory is, to put it politely, a stretch.

(There's more.)