Obama Exaggerates Big Time on Income Losses Under Bush in Speech on Economy

September 22, 2008

It sounds good so why not say it? That has been the philosophy of John McCain and Barack Obama throughout this campaign. Let’s take a look at what Obama said in his speech on Monday about the economy in Green Bay:

American families, since George Bush has been in office, have seen average family incomes go down $2,000.

Not true. Let’s look at the Census Bureau data, using the income measure cash money income as Obama has cited in the past. We’ll look at average household income and median household income, and average family income and median family income. None of them are even close to Obama’s $2,000 figure.

Average household income in 2007 was $67,609. In 2000, that figure was $68,792 (2007 dollars), adjusted for inflation (CPI-U-RS). That implies a decline of $1,183, which is fairly steep, but still only 59 percent of what he says it is.

How about median? Maybe he was referring to median instead of average since the average can be skewed by very high income earners (which oddly are top-coded in the CPS, which means that if growing income inequality is really true, the actual average hasn’t declined as much as the figures above suggest.)

Median household income in 2007 was $50,233. In 2000, median household income was $50,557 (in 2007 dollars), which implies a slight decrease of $324 in real income as measured by Census.

But let’s look at families only now. Maybe that’s what he was actually referring to since he used the term “family.” Family means more than one person is in the household and the two are related.

Average family income in 2007 was $78,845. In 2000, average family income was $79,193 (in 2007 dollars), which implies a slight decrease of around $348.

In 2007, median family income was $61,355. In 2000, median family income was $61,083. By this measure, real median family income has actually risen slightly from 2000 to 2007.

Anyway you slice it, Obama gave false information to the crowd about the income statistics, and of course, you know in what direction. Now here’s what he said about fiscal discipline under Clinton versus Bush:

When Bill Clinton was in office, I don’t know if you remember. We left with a surplus. He left office with a surplus. We now have over a $9.5 trillion debt…soon to be 11 at the pace we are going.

This isn’t a lie, but is pretty misleading. A surplus is a one-year amount in the black. But under Clinton, there was still a national debt. Now I’ll be the first to tell you that George Bush’s policies have not been fiscally responsible. But Obama is implying that Bush is responsible for the $9.5 trillion in debt as he conveniently compares a one-year budget situation (one-year surplus) with a cumulative debt that has been accumulating for years. The typical American doesn’t understand the difference between deficit and debt, and Obama exploits that.

There’s more nonsense in his speech that would take all night to document, but when you say what sounds good to a crowd, logic is thrown out the window, as are facts.


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