President Obama and the Deficit, or, “Did they print that graph upside down?”

Recently, I saw a Facebook post from The Federalist Papers website, congratulating President Obama for creating the largest deficit of any president in history:

Of course, I thought there might be some misreading of the deficit numbers, so I first did a Google search on “obama deficit.” This is a screen shot of some of the graphs displayed:

Deficit Graphs

Various analyses of the deficit under Obama. Google search “obama deficit.”

I’m not sure how much you can make out from the tiny charts, but some show the deficit drastically increasing, and others show it decreasing. It really does seem as if some of the charts were reproduced upside down. I honed in on one of the sites, a personal favorite, PolitiFact. Here is an article I found:

There are two drastically different statements: (1) Obama added more to the deficit than all previous presidents combined, and (2) Obama cut the deficit in half.

My initial guess is that both are true. It could be that people are citing different sources of data, or that people are using different definitions of deficit, or both could actually be true (Obama added more to the deficit than any other president, but it was much higher at the start of his term, so he did in fact cut it in half).

I could speculate wildly, but instead, let me start by listing the facts in the two articles I referenced:

The Federalist Papers
PolitiFact Wisconsin
Historical Tables from (
Office of Management and Budget chart (
At the end of 2008, the accumulated total of all US Deficits for all administrations since 1789 was $5.3 Trillion. For the six years 2009 through 2014, the Obama Administration has racked up an impressive $6.3 Trillion in deficits which are now more than all of the accumulated deficits before he took office.
[The chart] compares the yearly deficits under Obama, expressed — as they often are — as a share of the nation’s entire economy, which is measured by the Gross Domestic Product. At the start of Obama’s term, the chart showed, the figure was 9.2 percent. The latest figure was 4.1 percent.
The GW Bush Administration racked up $2.0 Trillion in deficits in the 8 years it held the realm (2001 – 2008). The highest annual deficit the Bush administration amassed over its eight years was a $459 Billion deficit in 2008, a record at that time. This is far less than each of the Obama years. The Obama administration holds the record for the top six annual budget deficits all accumulated in its first six years, with more than $1 Trillion deficits in each of its first four years alone.
The White House and CBO figures each show that in 2009 the deficit reached $1.4 trillion… By the end of fiscal year 2013, the deficit figure had fallen to $679.5 billion in dollars unadjusted for inflation. That’s a 52 percent drop.

There are several things I observed in the data. The Federalist Papers uses actual figures, takes deficits from several years, and totals them. This gives the amount added to the national debt, which is different from looking at deficits from year to year. The PolitiFact page looks at actual figures, but also looks at deficit compared to the GDP. This is a necessary calculation if we want to honestly compare the deficits under modern Presidents with those under Washington, Adams, and other early Presidents.

My guess appears to be correct. The deficit was high at the beginning of Obama’s first term, it grew in absolute numbers (but not relative ones) during his first term, then fell to this day. Let’s also remember much of that spending was to pull the country out of a recession; had we not spent the money then, the GDP would have fallen, and the relative numbers would look much worse.

Of course, what everyone (including me) is doing here is spinning. We are taking the same set of data and looking at it in different ways. What needs to be done is to determine what are the important areas to improve and what are the important ones to get under control. That is the work of economists, preferably ones without an agenda.

If I hear a presidential candidate proclaim, “I can balance the budget standing on my head,” I will assume it is because the graphs look better that way.


One thought on “President Obama and the Deficit, or, “Did they print that graph upside down?”

  1. Jim, Great analysis on this. I had frequently looked at the numbers presented from those with a left leaning perspective and those from the right and the difference seemed insane. I did suspect that the difference was due to how it was measured (dollars vs. percent of GDP) and, to a lesser degree, spin; but I never did the homework, so thanks for that. I’m not sure that I agree with your conclusions though (that spending was to pull the country out of a recession; had we not spent the money then, the GDP would have fallen, and the relative numbers would look much worse.) I agree the numbers would of fallen, but I don’t know how much, or specifically, which way the ratio would have gone.

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