Obama wrongly accuses Bush (and Paul Ryan) of causing the Great Recession

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American Enterprise Institute:

 

 

Obama wrongly accuses Bush (and Paul Ryan) of causing the Great Recession

 

James Pethokoukis |

August 14, 2012, 1:59 pm

 

The Obama campaign has made a curious economic argument as part of its attack on Paul Ryan:

Ryan rubber-stamped the reckless Bush economic policies that exploded our deficit and crashed our economy. Now the Romney-Ryan ticket would take us back by repeating the same, catastrophic mistakes.

Actually, Team Obama is saying the same thing twice here since the deficit would not have initially exploded without the Great Recession. (In 2007, the federal government ran a tiny budget deficit of 1.2% of GDP)

So which Bush policies, exactly, “crashed the economy”?

Certainly not the much reviled — at least by Democrats — Bush tax cuts, most of which President Obama says he wants to keep.

And certainly not Bush’s spending and debt, since Obama wants more of both. The most recent Obama budget, according to the Congressional Budget Office, would add $6.4 trillion more to the federal budget deficit over the next decade, leaving debt as a share of the economy stuck at around 76% of GDP vs. 37% pre-recession.

OK, if it wasn’t the taxes Bush cut or the money he spent, then what were the Bush policy actions that led to the Great Recession and “crashed our economy”?

Maybe the villains here are the Bush policies that deregulated Wall Street? A few problems with this theory, though. For starters, the law that ended Glass-Steagall was signed by President Bill Clinton — the guy who will be introducing Obama at the Democratic National Convention — in 1999. Second, few analysts think the end of Glass-Steagall directly contributed to the financial crisis.

Another candidate — and you hear this one a lot read more http://www.aei-ideas.org/2012/08/obama-wrongly-accuses-bush-and-paul-ryan-of-causing-the-great-recession/