How You Make a Trillion Dollar Deficit
…and then try to blame Democrats for it.
This is simply fantastic analysis from David Leonhardt from the NYT tracing how the US got to trillion dollar deficits, that you should all bookmark and refer to when the usual suspects show up to pretend that the sky just started falling on Jan 20, 2009. Especially now that the GOP will be repeating the lie that Obama is responsible for all of it are pushing the Read the whole thing, but here is the gist:
The story of today’s deficits starts in January 2001, as President was leaving office. The Congressional Budget Office estimated then that the government would run an average annual surplus of more than $800 billion a year from 2009 to 2012. Today, the government is expected to run a $1.2 trillion annual deficit in those years.
You can think of that roughly $2 trillion swing as coming from four broad categories: the business cycle, President George W. Bush’s policies, policies from the Bush years that are scheduled to expire but that Mr. Obama has chosen to extend, and new policies proposed by Mr. Obama.
The first category — the business cycle — accounts for 37 percent of the $2 trillion swing. It’s a reflection of the fact that both the 2001 recession and the current one reduced tax revenue, required more spending on safety-net programs and changed economists’ assumptions about how much in taxes the government would collect in future years.
About 33 percent of the swing stems from new legislation signed by Mr. Bush. That legislation, like his tax cuts and the Medicare prescription drug benefit, not only continue to cost the government but have also increased interest payments on the national debt.
Mr. Obama’s main contribution to the deficit is his extension of several Bush policies, like the Iraq war and tax cuts for households making less than $250,000. Such policies — together with the Wall Street bailout, which was signed by Mr. Bush and supported by Mr. Obama — account for 20 percent of the swing.
About 7 percent comes from the stimulus bill that Mr. Obama signed in February. And only 3 percent comes from Mr. Obama’s agenda on health care, education, energy and other areas.[…]
I don’t think that the less than 250K tax cuts were and extension of Bush’s policies, since he was unconcerned about taxes for this group. Nonetheless, the whole piece is worth a read, including good discussion on the inaction in fixing the deficit. It will need to be fixed, but as you can see from the chart after the jump, that the wingnuts screaming that the sky is falling are basically screaming for Obama to fix what is mostly their mess. And the apocalyptic rhetoric about how we all die if the deficit isn’t solved? Ask yourself where these people were when GWB decided to borrow money to give tax cuts. Be sure to scroll all the way down the chart — the last two arrows would be the bit that Obama is responsible for.
Tags: Bush's Fubar Economy
Take a look at Washington Post for the visual.
http://blog.heritage.org/2009/03/24/bush-deficit-vs-obama-deficit-in-pictures/
Bush Deficit vs. Obama Deficit in Pictures
Posted March 24th, 2009 at 10.20am in Ongoing Priorities.
President Barack Obama has repeatedly claimed that his budget would cut the deficit by half by the end of his term. But as Heritage analyst Brian Riedl has pointed out, given that Obama has already helped quadruple the deficit with his stimulus package, pledging to halve it by 2013 is hardly ambitious. The Washington Post has a great graphic which helps put President Obama’s budget deficits in context of President Bush’s.
What’s driving Obama’s unprecedented massive deficits? Spending. Riedl details:
President Bush expanded the federal budget by a historic $700 billion through 2008. President Obama would add another $1 trillion.
President Bush began a string of expensive financial bailouts. President Obama is accelerating that course.
President Bush created a Medicare drug entitlement that will cost an estimated $800 billion in its first decade. President Obama has proposed a $634 billion down payment on a new government health care fund.
President Bush increased federal education spending 58 percent faster than inflation. President Obama would double it.
President Bush became the first President to spend 3 percent of GDP on federal antipoverty programs. President Obama has already increased this spending by 20 percent.
President Bush tilted the income tax burden more toward upper-income taxpayers. President Obama would continue that trend.
President Bush presided over a $2.5 trillion increase in the public debt through 2008. Setting aside 2009 (for which Presidents Bush and Obama share responsibility for an additional $2.6 trillion in public debt), President Obama’s budget would add $4.9 trillion in public debt from the beginning of 2010 through 2016.
UPDATE: Many Obama defenders in the comments are claiming that the numbers above do not include spending on Iraq and Afghanistan during the Bush years. They most certainly do. While Bush did fund the wars through emergency supplementals (not the regular budget process), that spending did not simply vanish. It is included in the numbers above. Also, some Obama defenders are claiming the graphic above represents biased Heritage Foundation numbers. While we stand behind the numbers we put out 100%, the numbers, and the graphic itself, above are from the Washington Post. We originally left out the link to WaPo. It has been now been added.
CLARIFICATION: Of course, this Washington Post graphic does not perfectly delineate budget surpluses and deficits by administration. President Bush took office in January 2001, and therefore played a lead role in crafting the FY 2002-2008 budgets. Presidents Bush and Obama share responsibility for the FY 2009 budget deficit that overlaps their administrations, before President Obama assumes full budgetary responsibility beginning in FY 2010. Overall, President Obama’s budget would add twice as much debt as President Bush over the same number of years.
Here is a link for the full pictorial. It looks pretty bad for Obama.
http://delawarerepublican.wordpress.com/2009/06/11/bush-versus-ob…or-big-spender/
Enjoy,
Mike Protack
Blame Bush, blame Obama…but, all revenue bills originate in the House of Representatives.
The Founders knew that, unrestrained, government and its associated bureaucracy would invariably expand, indefinitely. This is why they incorporated Article I., Section 8., into the Constitution, and why they opposed a direct tax on incomes to finance federal functions.
Socialism was tried in the Soviet Union and Eastern Europe, and it failed, miserably. Maybe some of you are old enough to remember the difference between statist East and capitalist West Germany- the difference was stark.
China has discovered the error of their ways; they still have a ways to go, but look at the result so far. Ditto Vietnam.
I wonder why those two workers’ paradises…Cuba and N. Korea, forbid travel (except by the political elite, of course)? Could it be that they know that the people want to get the hell out!?
The European Socialist States are failing, with the exception of Norway, a country with great oil wealth and few infrastructure expenditures.
Some say that ‘times change.’ True, the calender tells us so…but read Horace (suggest; Dining at the Rich Man’s House), and you’ll see that technology and customs may change, but people don’t.
With Socialism, all you get at the end of the day is a ring through your nose. ‘Oh, it will be different this time.’ Yeah…sure.
Heritage Foundation. LOLOLOLOL!
And rick, your reliance on hyperbolic wording utterly destroys any point you try to make.
This makes me believe that you’d have no point at all considering such poor attempts at exaggeration.
Yeah, really. I may start moderating Protack’s gibberish if it looks to me that he isn’t even reading much less responding to the post at hand.
And for future reference, Ground Zero for conservative disinformation doesn’t count as a counter to anything.
Same for callerRick — there is no socialism on offer, except some extensions of the socialism you cheered on from BushCo.
Yeah. Virtual slavery (USSR) is hilarious (or, hyperbolic).
“…the socialism you cheered on from BushCo.
I’ll admit that I fell for Bush’s b.s. the first time, but I learned to despise him (probably for different reasons than you). I now, generally, have nothing but contempt for the political class as a whole.
Don’t worry, cassandra_m.
The link that Mad Mike posted that he says “looks pretty bad for Obama” links to a page that doesn’t exist.
That’s pretty apt, don’t you think?
If you really look at the socio-political structure during the peak USSR years, the whole thing wasn’t even Communism let alone socialism….it was Fascism (- aka Stalinism)
The State, by no means, controlled and distributed recourses equally, so no communism, or if you prefer, hard Socialism. The
bankers & uber wealthySoviet aristocracy soaked up all the capital for their own use and distributed absolute shit to the common folk.You get potato; I get Joe Stalin’s Cadillac.
VC, are you saying that Lenin wasn’t a Marxist?
Are you saying the Soviet state didn’t control production? Wages? Healthcare? Travel?
Please.
Marxism, Socialism, Communism, ….they are all Statism….like our Founders, I prefer Individualism.
CallerRick is *flaunting* the fact that he knows nothing of 20th century history.
“The State, by no means, controlled and distributed recourses equally, so no communism, or if you prefer, hard Socialism.
You’re on to something there. That is because the Marxist system requires a ‘vanguard,’ as Lenin put it…ostensibly to facilitate the inevitable dictatorship of the proletariat. In reality, the vanguard is all about dictatorship, period. In the USSR, China, Cuba and elsewhere, Marxism (or Collectivism or whatever ism you care to use) is merely a means to an end; the subjugation of the people, in the name of the people.
Our Founders did not prefer Individualism.
Don’t confuse supporting the rights of the individual with Individualism; those rights are more akin to the Enlightenment Movement, not Libertarianism (which back then would’ve been called Anarchy). The Founders relied heavily on the philosophies of Locke and Rousseau, where the people are sovereign but an adherence to social will is required to preserve a fragile union.
Now we can get into the argument between the Federalists and Jeffersonian Democrats, but that’s mostly about the role of the Federal government, Mercantilism v Lassie Fair, and who’s better…farmers or urbanites.
And can you read? I never said anything about Lenin. Lenin was an utopist. I was talking about the height of the USSR – 40s through 70s…or wasn’t I literal enough for ya?
See – in #14 we agree…
Whether it’s pure Capitialism or pure Communism, who or whatever is in power will collude in order to maintain power…
If you want to see a micro version of Capitalism run amok – just look at baseball owners prior to the advent of free agency….
Now imagine that on a national scale.
Lenin led the revolution, so it would be absurd not to mention him, whether you did so, or not. By consolidating power in the hands of the few, Lenin facilitated Stalinism.
“The Founders relied heavily on the philosophies of Locke…”
Locke: “To understand political power alright, and derive it from it’s original, we must consider what estate all men are naturally in, and that is, a state of perfect freedom to order their actions, and dispose of their posessions and persons as they think fit, within the bounds of the laws of Nature, without asking leave or depending upon the will of any other man.”
Those who wish to be wards of the state, will be. “Slavery is freedom!”
It also says in that article that he isn’t doing anything about it.
“Bush behaved incredibly irresponsibly for eight years. On the one hand, it might seem unfair for people to blame Obama for not fixing it. On the other hand, he’s not fixing it.”
“not fixing it is, in a sense, making it worse.”
so i guess don’t blame him for it happening, blame him for it going to get worse?
Either way, this is going to be a rough year. Probably the worst so far. The market is getting high enough just to get the sucker investers in, then drop out from under them.
rick – you quote out of context.
but that’s ok.
go read The 2nd Treatise of the State of Nature and you’ll understand how that quote is applied.
“Go read The 2nd Treatise of the State of Nature and you’ll understand how that quote is applied.
I can’t read, remember?
😆
Ok so Bush screwed up, I do not see any real defense of that. Expanding the mistake does not seem the best solution.
I don’t think our Republican visitors can read. Most of the deficit comes from Bush.
They can read, they are just in severe avoidance behavior.
I can read. I can also read the plan for the future, which is all any of us can really hope to change. And which way do you thing spending is headed ? How do you expect to see that paid for? Do you really believe the government spending is the best kind of spending?
There is a bunch of spending right now designed to put out the fires your guys lit over the last few years. That is critical and likely not enough. Some of that spending is is resetting where government provides its support. Instead of focusing on richer people as Reagan wanted, it gets refocused to middle class people. Where were you when BushCo started all of the borrowing to pay for tax cuts? Or a war that was unnecessary? Or even for Medicare Part D?
Health care especially is going to be a big new obligation. But a necessary one. You already pay for all of the uninsured by various ways. You already pay for the massive inefficiencies of a system that basically exists to extract value for shareholders from your premiums and returns little in the way of improved health outcomes. The system is broken and is a real drag on the competitiveness of American businesses AND workers — not to mention not delivering on the health care that lots of people think they are already paying for.
But back to the point — any repub in office right now would be doing much the same thing and you’d be perfectly delighted with that, especially since it would mean the continuation of the massive transfer of American tax dollars to wealthier Americans.
Bush, obama, whatever. not the point. the point is, you can’t deficit spend your why out of a deficit. Its like trying to pay off a credit card with a different credit card. The interest is going to build up somewhere, and that will have to be settled.
just remember that when more money is printed, it is loaned to our country. we owe interest on it.
Bush, Obama, the Congress…who cares? Meanwhile, China uses the interest they receive for financing our fiscal irresponsibility to build a nuclear arsenal, aircraft carriers, submarines, cyber-warfare technology, ICBM’s and space-based weaponry.
Phil and Caller Rick = Fail
We need to untangle why we are in this mess in order to get out of it.
Just embrace the fact that Bush sucked. That would be a start.
We don’t think government spending is magical spending. We’re embracing the simple concept that GDP = consumer spending + private spending + government spending. Right now, both consumer and private spending are way down and this drags down the whole economy. We’re using government spending as a way to stimulate the economy. It’s a simple concept.
The other concept, stop spending, has been tried before. Its hero was Herbert Hoover, who caused the Great Depression. That’s what we’re trying to avoid.
When will you embrace the fact that:
A) I’m not a republican.
B) I never voted for Bush.
C) I know he sucked.
Do you even read any of the comments before you respond? What are you going to do when you can’t answer everything with its Bush’s fault?
UI addressed your comment quite directly, Phil.
you can’t deficit spend your why (sic) out of a deficit
You absolutely can. Businesses do it all the time. It is just a matter of being able to invest the money your borrow so that you get a return higher than the cost of borrowing. Then you use the profit to pay off your previous debts.
In the government’s case, it is a matter of borrowing to increase the GDP so they get increased revenues over-and-above the cost of borrowing.
And what UI said.
#31
So Hoover ignored the Depression, so that’s why it got worse? Well, that is just really really wrong. The programs and laws that he introduced couldn’t stop the downward spiral of the depression. FDR’s New Deal was damn near modeled after the things Hoover implemented.
Yes, Hoover made the Great Depression worse. Don’t start believing the wingnut revisionism. Hoover cut spending. Employment started going up after Roosevelt took over and implemented things like a bank holiday (to stop bank runs) and the FDIC. The WPA and other programs put people back to work plus built the infrastructure of this country which is still in use today. In fact, the only time job growth dipped was when Roosevelt gave into the cut spending nuts. I also find wingnut Depression revisionism funny since they say it was WWII that got us out of the Depression. Who do they think was paying for all those programs? (Hint: it was the government.)
Phil,
When you say you never voted for Bush I think you are a liar.
I guess the Federal Home Loan Act, or the Reconstruction Finance Corporation is nothing.
He expanded the programs that hoover implemented. Herbert hoover didn’t make it worse, he couldn’t stop it. There is a difference. I mean, come on, at least wiki some of this.
“A) I’m not a republican.…Phil
I’m not either. Could it be that the left can’t read minds after all?
I also find wingnut Depression revisionism funny since they say it was WWII that got us out of the Depression. Who do they think was paying for all those programs?
In terms of spending, WWII basically doubled down on the New Deal, and won the bet.
Could it be that the left can’t read minds after all?
Not exactly like you could find a claim otherwise.
But if you are here owning wingnut talking points and other know-nothingism you get to be a wingnut.
“…wingnut talking points and other know-nothingism…”
Perhaps I learned my ‘know-nothingism’ (aided, no doubt, by the thirty-six members of my incoming freshman class of around 200 who had perfect 1600 SAT scores), here:
http://www.williams.edu/
Elitist.
So that’s it? You’re trying for credibility based on SAT scores?
No wonder you have little to say.
(aided, no doubt, by the thirty-six members of my incoming freshman class of around 200 who had perfect 1600 SAT scores)
Ah, so you were one of the pity admissions.