Who Really Caused The Deficit?

Discussion in 'Politics' started by Free Thinker, May 15, 2012.

  1. The vast bulk of the debt is the result of policies enacted during the Bush administration coupled with automatic increases in federal spending and decreases in tax revenue triggered by the economic downturn.

    Those are economic facts of life known to experts but that often gets lost in the political debate (and which Obama’s opponents are willing to obscure). So with the GOP’s push to return the deficit to the center of the political conversation, here’s quick reminder of the basic facts that you may have forgotten.

    As the chart below reveals, the main drivers of projected deficits over the next decade are the wars of the oughts in Iraq and Afghanistan, the Bush tax cuts and the so-called “automatic stabilizers” — unemployment insurance spending, lower tax burdens — built into existing policy to combat economic downturns. Recovery measures by Bush and Obama caused a short-term spike in deficits but have mostly phased out and thus represent only modest fractions of the national debt.
  2. Max E.

    Max E.

    Sorry to break the news to you, but 4 years into Office Obama owns this mess..... He chose to extend the Bush tax cuts, and he could pull out of Afghanistan today if he wanted to....

    <iframe width="560" height="315" src="http://www.youtube.com/embed/VgIswmKt8wo" frameborder="0" allowfullscreen></iframe>
  3. Lucrum


    "Who Really Caused The Deficit?"

    I blame Obama.
  4. It all started by Romney when he was 15.
  5. jeepers, you mentioned "Bush" 5,280 times. You missed it by a mile, I blame Barbara Bush, it's her fault.
  6. Ricter


    <img src="http://talkingpointsmemo.com/images/deficit-causes.png">
  7. AS usual , shoot the messenger.
  8. Max, you are smarter than this. You know when Obama took office the debt was going parabolic. C'mon man.

  9. And Romney wants to make the Bush tax cuts permanent,cut taxes even more,wanted to stay in Iraq and wants to increase defense spending
  10. http://www.tnr.com/blog/jonathan-cohn/92569/bush-obama-deficit-tax-cut-stimulus-health


    The Bush Deficit

    Critics of President Obama never tire of blaming him for today's high deficits. But if blame belongs with one president, it belongs with Obama's predecessor, George W. Bush. The chart above, which the New York Times created based upon figures from the Center on Budget and Policy Priorities, illustrates this point very clearly. But it's worth reviewing the history here, because while it's familiar to most of us who follow politics it doesn't seem to get a lot of attention in the political debate.

    By the end of the 1990s, the federal budget was in surplus for the first time in decades. Partly that was a product of unusually strong economic growth, during the internet boom, which had swelled tax revenues. But partly that was a product of responsible budgeting, presided over by the most recent two presidents, George H.W. Bush and Bill Clinton. In order to reduce deficits, lawmakers and those two presidents had agreed both to raise taxes and to reduce spending.

    In the 2000 campaign, Clinton's would-be successor, Al Gore, campaigned on a promise to, in effect, put those surpluses aside for a rainy day. Bush would have none of it. The government had too much money, he said; the responsible thing was to give it all back to the taxpayers. In office, he did just that, presiding over massive tax cuts that gave, by far, the largest benefits to the very wealthy. Bush promised that the tax cuts would act like a "fiscal straightjacket," preventing government from growing. But then he, and his allies, launched two major wars and enacted a drug benefit for Medicare, all without paying for them.

    Today's fiscal gap is largely a product of those decisions, as the graph above shows. It has very little to do with anything Obama did while in office. In fact, the contrast between the two administrations could not be more striking. Obama's primary undertaking has been comprehensive health care reform. But he insisted that it pay for itself, through a combination of spending cuts and tax increases.


    What’s also important, but not evident, on this chart is that Obama’s major expenses were temporary — the stimulus is over now — while Bush’s were, effectively, recurring. The Bush tax cuts didn’t just lower revenue for 10 years. It’s clear now that they lowered it indefinitely, which means this chart is understating their true cost. Similarly, the Medicare drug benefit is costing money on perpetuity, not just for two or three years. And Boehner, Ryan and others voted for these laws and, in some cases, helped to craft and pass them.
    #10     May 15, 2012