Economic Fact vs Fiction

The other day I posted a brief snippet from a fairly long scholarly article related to the fact that contrary to much Far Right rhetoric, ....well, read it for yourself below.  It triggered a response from a dear friend who shares some, but not all of my opinions on politics, the economy, etc. It led to an interesting discussion, so here it is: 

Me:

        "In the Obama era, the deficit has shrunk by $1 trillion. That’s “trillion,” with a “t.” As a percentage of the economy, the deficit is now down to just 2.5%, which is below the average of the past half-century, and down from 9.8% when the president took office. Suck it, Tea baggers!"

He:

       "The deficit may be lower, but what about the total overall debt since he has taken office? Or is that the Fed reserve to blame? Oh... The admin doesn't control the Fed? I know you'll have a good answer, but I don't think praising the reduction in deficit outweighs increasing the overall debt by tenfold."Italics are mine) "Also, we're always scared of inflation... Which current policy has caused deflation if anything.. I don't mind that honestly for a short period of time. But economics say printing money causes inflation.. The current admin has overseen TRILLIONS printed. Why has there not been inflation? Because GDP is SHIT. Sometimes I wonder about GDP and the importance, growth? Or the well being of people as a whole? But looking back, lack of GDP hurts the lower and middle class because it doesn't create jobs. Sorry, economically, the admin hasn't done a thing. In regards to injection of capital to the market, win. Market surge? Win. Help the lower to middle class? Fail. If the rich get richer b/c injection of capital, and it doesn't create new jobs, what was the point?

This is my battle between the left and the right. I honestly see premise of helping the little guy from the left, but will the left continue to push our overall debt along with act as justification for the rest of the world to print money, to the point where our financial system as a whole is broken because we've printed too much?

Me:

        Not the gist of what I posted. Obviously, the goal should be debt reduction, but you can't lower debt of you don't lower the deficit below zero eventually. My point is that with current Far Right, especially the Tea Party emphasis on lower taxes, there would be minimal if any reduction of the deficit. The article I took this short snippet from was an article which enumerated the reasons for deficit reduction, one of the primary ones of which was increased revenue collection.

        Every single Republican wannabee (except Ben Carson who increasingly apparently knows nothing about anything)  has a "tax cut" plan. All this is in spite of the fact that the "tax cuts on the wealthy' idea has NEVER worked here or in any other nation. The "trickle down" theory has been tested and failed so many times, that the only wonder is that  it survives anywhere.  An Australian politician recently accurately described it as "The rich pissing on the poor!"  The answer to that is that  people like the Koch brothers and Adelson  and the Walton heirs continue to spend billions to try to elect people who will keep the trickle down fallacy alive.

        In fact, in a recession recovery, the deficit this year is lower than any of the Reagan years and most of the Bush years. My point is that while the Far Right has crowed about deficit reduction, only Clinton and now Obama seem  close to  achieving  it. The Reagan deficits were accumulated even in the absence of war, unlike Bush 43's desert adventure.

        Regarding the Federal Reserve and your implied  assertions that the Administration somehow controls it... First of all, once nominated by the  POTUS, the Senate must confirm or reject the nominee. These nominations have historically been economists with impeccable credentials and from both parties.  Unlike members of Congress who have, in some cases, not even a college degree, these are actually qualified persons.   The chair serves a 7 year term, not contiguous to POTUS election cycle and the Board of governors are appointed to staggered 14 year terms, all of which makes it pretty damned tough (in spite of what bloviators  like Donald Trump say) for any POTUS to "control" the board, since they are either his predecessor's appointees or will be there after he or she  is gone.  

        Speaking of inflation, again there seems to be a disconnect  between what some believe and reality. Here's a list by year of the annual percentage of inflation. 2005 - 3.4%, 2007 -2.5%, 2009 - 2.7%, 2011 - 3.0%, 2012 - 1.7%, 2013 - 1.5%, 2014 - 0.8%.........tell me again how the current administration's policies are inflationary?

        The idea of "increasing the debt tenfold" is a grossly incorrect assertion.  Starting from the 2009 budget (actually Bush's last budget, the debt has increased from (round numbers) 12 to 16 trillion, an increase of 4 trillion (for the math challenged, that's an increase of 1/3, not 10). From the first Obama budget (2010) the debt has increased by 2 trillion. As a reference, during the Bush 43 years, (WITHOUT A RECESSION!) the debt increased from 6 trillion to 10 trillion (an increase of four trillion and an increase of 2/3!).  Including the 2009 budget (Bush's, but would probably have been as high in any administration due primarily to TARP) under the Bush 43 authority, the debt rose by actually almost double 6 trillion to 12 trillion! None of this is even remotely close to "tenfold."

        Re: "Injection of capital:"  It's easy to find articles by talking heads of the far right ca 2010-11 absolutely lambasting the current POTUS for continuing some of the economic efforts of the previous one.  As 2012-14 unfolded and unemployment did go down, and as the "bailed out" financial entities paid back all, or the vast percentages,  of the TARP money, those sources became strangely quiet. Why? Because the TRAP money wasn't a "gift: as they had claimed and unemployment had slowly crept back down.

        By the end of 2010, unemployment was actually lower than the Reagan years of 1982 and 83! Currently unemployment is hovering around the 5%-6%  mark. This obviously confounds the earlier claims regarding TARP. The "capital injection" stopped years ago, but the rhetoric lingers on, in spite of very low inflation. What has been well and truly overlooked is the lack of comparison made by the TARP nay-sayers to the Savings and Loan bailout, most of which was NEVER repaid! As a side note, Bush 43 brother, Neil Bush, who was a director of the infamous Silverado S&L which got $1.3 billion in bailout funds,  was twice found to have engaged in fraudulent practices and was fined $100,000. His fines were all paid by Republican supporters. Go figure, huh.?