Wednesday, July 25, 2012

Grading PolitiFact (Texas): Paul Sadler and the doubled debt?

The issue:

(clipped from

The fact checkers:

Sue Owen:  writer, researcher
W. Gardner Selby:  editor


Speaking for myself, if I fact checked Paul Sadler on a claim that the federal debt doubled during the Bush administration there's little chance I'd have much problem with it.  It's the way PolitiFact does its fact checking that draws my scrutiny.

PolitiFact tracked the origin of Sadler's claim down to a chart published in the New York Times.

According to the chart, the Bush administration began with a $5.8 trillion gross federal debt, which grew by $6.1 trillion to reach $11.9 trillion --  an increase of 105 percent, or slightly more than double. The Times ascribed the increase in debt to "tax cuts, the wars in Iraq and Afghanistan, (the) economic downturn in 2001 and recession starting in 2007."

Following a suggestion from Treasury spokesman Matthew Anderson, we found that plugging the fiscal years of Bush’s presidency -- October 2001 through September 2009 -- into the Treasury’s online calculator gives debt figures that tally with the Times graphic. While that period begins nearly nine months into Bush’s presidency, it also aligns with the years over which he held budgetary sway.
With a little luck Bush can get credit for President Obama's FY2009 spending while also losing out on any help at all from the modest budget surplus in 2001.

PolitiFact got help from Robert Sahr, a political scientist at Oregon State University.

Sahr produced a spreadsheet for us with fiscal year-end debt numbers from the federal Office of Management and Budget. Among the results: As with the Treasury calculator, 2001-2009 public debt in non-inflation-adjusted dollars went up 130 percent. Adjusted for inflation (to 2011 dollars), though, the increase was 88 percent.
Lucky Bush!  Using the OMB numbers will, in fact, allow Bush to take advantage of Obama's 2009 spending, in particular the initial phase of the economic stimulus package. Bush also ends up on the hook for the OMB's calculations for bailout spending, most of which was repaid and thus had little lasting effect on the federal debt.

This is a PolitiFact fact check.  This is what you get.

Some news analyses have compared changes in debt using inauguration dates. We checked those with the Treasury calculator, finding that from Bush’s first inauguration, January 20, 2001, to the day President Barack Obama took office, January 20, 2009, gross federal debt in non-inflation-adjusted dollars rose from $5.7 trillion to $10.6 trillion, up 86 percent.
So now PolitiFact is trying to steal credit for stimulus spending from Bush.  But at least he still gets a heap of credit for bailout loans at this stage.  Note that PolitiFact doesn't bother chipping away at the 86 percent figure by adjusting the figures for inflation.  In 2009 dollars the $5.7 trillion from 2001 turns into $6.9 trillion, which drops the increase by 32 percentage points down to 54 percent.  The latter figure doesn't look very good for Sadler, so let's just forget we ever did that calculation.  Thank goodness PolitiFact didn't bother us with such distractions.

Now for some comedy relief from Sadler:
When we checked back in with Sadler, he objected to adjusting the debt changes for inflation, saying by email: "I seriously doubt any holder of the debt or your bank would allow you to adjust your debt for inflation.  The amount owed is the amount owed - you don't get to adjust it for inflation."
It was magnanimous of PolitiFact to refrain from pointing out that Sadler's statement is silly.  Inflation is the borrower's friend.  It is the lender who would like to adjust for inflation and receive an added bonus to the repayment.  Fortunately for the lender, inflation is typically accounted for in the scheduled interest rate.  Lucky Sadler!

PolitiFact Texas concludes:
We see how Sadler reached his conclusion. In raw terms, both the public debt and gross federal debt more than doubled during the fiscal years corresponding to Bush’s presidency. However, adjusting for inflation, gross debt increased 70 percent over those years, while public debt increased 88 percent. That’s not quite doubling.

We rate Sadler’s claim Mostly True.

1)  Evidently none of the figures recognize the temporary nature of the debt resulting from the bailout spending in 2009.  That bailout spending accounted for very roughly $441 billion as of  June 30, 2009 (note that the government accounting is not straightforward--the OMB and CBO use different methods of calculating TARP spending).  The budgeted spending is very probably much less than the amount added to the debt because of loan repayments, and the spending will appear higher in OMB estimates.

2)  Bush gets about $120 billion in ARRA (stimulus) spending credited to his FY2009 account.  ARRA spending and bailouts combined may account for nearly $600 billion in supposed debt.  The story omits all of this context.

3)  Following the above, the inauguration date figures probably provide a better estimate of the debt increase than those from the end of the 2001 and 2009 fiscal years:  That estimate comes to a 54 percent increase on the gross debt after adjusting for inflation.

4)  PolitiFact's figure for the increase in gross debt after adjusting for inflation represents a 63 percent inflation (34 percentage points) over the more realistic 54 percent figure.  PolitiFact proposes grading Sadler "Mostly True" for a figure that, by PolitiFact's accounting, was exaggerated only by as much as 43 percent.  Sadler appears more accurate than PolitiFact.

5)  PolitiFact omits a great deal of information regarding the precipitous climb in spending for 2009, much of it owing to the bailout programs, and apparently never considers the debt as a percentage of GDP, perhaps the method most favored by economists in measuring the growth of debt.

In terms of normal communications, Sadler is in the ballpark even if the debt only increased 54 percent under Bush.  Sadler's mild exaggeration is not nearly as offensive as sham fact checking that pretends to an expertise absent in the finished product.  This fact check looks like it was chosen and executed primarily to aid President Obama in the 2012 election by blaming Bush for a large federal debt.

Contrast this fact check with PolitiFact's consistent treatment of recent Republican claims that ObamaCare taxes make up the largest tax increase ever.  PolitiFact doesn't even pause at adjusting for inflation and proceeds straight to the percentage of GDP.  Lucky Charlotte Bergman!  Lucky Rush Limbaugh!  Lucky Josh Mandel!  All recipients of a "Pants on Fire" rating thanks to PolitiFact's use of the GDP measure.

The grades:

Sue Owen:  F
W. Gardner Selby:  F

I'm okay with a "Mostly True" for hapless Paul Sadler, who apparently has no clue as to how inflation affects lending.  I'm not very sympathetic to fact checking that could pass for deliberate partisan spin.


For the curious (obviously not PolitiFact), gross debt as a percentage of GDP increased from 56.4 percent in 2001 to 83.4 percent in 2009.  That's an increase of 47.9 percent, well short of the 100 percent figure that would mean doubling, and even short of the 50 percent increase that would allow Sadler to do some liberal rounding up.  Lucky.

Correction July 26, 2012:  Originally published including the sentence starting "The latter figure doesn't look very good for Sahr."  Sadler was the name I intended to use.  Apologies to good Mr. Sahr for my error.

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