February 25, 2012 by David K. Sutton
Expiration Date: Recollection Of Gas Prices & Federal Deficit
Apparently our recollection has a built-in expiration date when it comes to things like the price of gasoline or the federal budget deficit. At least it seems that way when you hear reports about either in the media. The reason I focus on these two items is because they are prominent in the political debate, particularly among Republican presidential candidates.
The candidates talk about the high price of gas and the large budget deficit as proof that President Obama has failed. They conveniently ignore the economic conditions and world events that have much more influence than any sitting president. The Republican candidates would like you to forget that both the price of gasoline and the federal budget deficit were higher during President Bush’s last year in office and his final budget.
Federal Budget Deficit
The last budget under President Bush was 2009. Yes, this was Obama’s first year in office, but the fiscal year starts October 1. Therefore, 2009 was Bush’s final budget and it ran from October 1, 2008 to September 30, 2009. That budget year saw a $1.41 trillion deficit. Every year since has seen slightly smaller (but still very large overall) deficits of $1.29 trillion in 2010 and $1.3 trillion in 2011. The 2012 estimate is $1.33 trillion. So yes, we have massive year-after-year budget deficits but they started under Bush, not Obama. In the case of either presidency, the economic downturn that started in 2008 was the biggest contributing factor.
As a side note, the second largest contributing factor is the Bush (and now Obama) tax cuts. If congress allows those tax cuts to expire the deficit largely takes care of itself in the coming years assuming the economy continues to grow.
Price Of Gasoline
Newt Gingrich has apparently staked what’s left of his campaign for president on the rising price of gasoline. He talks about this rise like it’s something new, but the price of gas always starts to rise this time of year and it will likely peak sometime in the summer before beginning to taper off heading into November and election day. Good luck with that Newt.
There is no question the price of gas is historically high and it is a fact that it’s higher now than it has ever been before at this point in the year, but the price of gasoline has been higher. Have we already forgotten the summer of 2008? In that year the price of regular gasoline topped out at $4.11 in July. At the time of writing this article, the average price of gasoline is now $3.67. So we have a way to go to get to $4.11 but it does seem very likely we will get back to $4.11 and probably set a new record high later in the summer. Some are estimating $5, only time will tell. But the point of all of this is that Obama is not the cause of high gas prices. If Bush wasn’t the cause of $4.11 gas then Obama isn’t the cause of $3.67 gas. The improving economy, world demand, and events in Iran and the Middle East are the largest contributing factors to rising gas prices.
photo by Kate Tomlinson via Flickr