President George W. Bush referred to his 2001 tax cuts as a "fiscal straitjacket for Congress." Alas, he never forced them to put it on. As President Barack Obama said last night, the Bush Administration and Congress put two wars and a medicare prescription drug benefit on the credit card. Republicans didn't get serious about tightening the straps on that straitjacket until a Democratic President and Congress needed the fiscal leeway to pour on government stimulus to avert a capital-D Depression.
The following charts lay out where we can lay responsibility for our federal deficits.
According to the budget projections made at the beginning of President Bush's term, we were supposed to have growing surpluses through the decade. Bush undershot those projections by a half-trillion in his FY 2002 budget and kept rolling down the fiscal hill from there. President Obama has undershot his term-opening budget projections as well, but no worse than Bush did, and mostly with temporary spending.
Let's look at specific policies causing those red bars to drop:
Both Bush and Obama responded to the recession with emergency spending: TARP, bailouts, and stimulus. Take those recession responses out of the equation, and you find new Bush policies racking up $509 billion in deficits per year in his administration. Obama's yearly non-stimulus deficit clip: $215 billion.
President Obama has engaged in plenty of deficit spending and extended the Bush tax cuts, largely because one can argue such actions make economic sense amidst a recession. Republican fiscal restraint right now in Washington and the state capitals is creating a government recession that undermines growth.
Republicans have come to fiscal Jesus at exactly the wrong time, and they are looking to cut exactly the wrong things. If we want to go after the deficit, we have to go after the programs that have caused it. The stimulus put us in the red, but the stimulus is done. The big causes of the deficit left to tackle are, in order, endless wars, the Bush(-Obama) tax cuts, and (in relatively distant third place) non-defense discretionary spending. Health care reform adds to that tally as well, but notice that ObamaCare adds less to the deficit than BushDrugCare.
If you're mad about the national debt crisis, you can holler at Dems for balking at cuts to the social safety net. But you should holler even louder at the Norquist-drone Republicans who refuse to address the single biggest deficit driver, the Bush(-Obama) tax cuts.
Fight the deficit: end welfare for the wealthy.
Cory,
You need to look at both the revenue and spending, not just the net. So your analysis is completely off. It is the stupid spending. Been that way since the revolutionary war.
But the mentality reflected in this post is that it all is due to a president in charge. So why don't we become honest and start calling the president...king.
Where is the plan to pay off the debt? Congress has spend more than it takes in for decades. We need to have a plan that wipes out any deficit spending and starts paying back all that debt and we need to start working on that plan today.
...and Michael, I'm pretty sure you can't do that without raising revenues.
Michael,
Step 1: End the Fed
Step 2: Reduce spending to constitutional levels
Step 3: Reverse 16th & 17th amendments.
Really, the 17th amendment?
You know maybe you're right, I'm sure putting the Legislature in charge of who goes to the Senate will help. Look at how well all these state governments are doing with their budgets.
Matt ~ A large majority of state's rights have been lost due to no one looking out for them. The original idea of a Senator was to make sure a state wasn't taken advantage of by it's citizens or the federal gov't. I base a lot of power being removed from the local level b/c of the 17th ammendment. There are actually some pretty good articles out there on the topic, many which point to the 17th ammendment being a direct cause of putting people in powerful places due to large amounts of special interest money.
Cory, It can be done. It will demand sacrifice from all: more taxes and less entitlements.
We should've had a 1 to 2 trillion savings account with the federal budget we are running now.
I say take the Democrat tax increases and pair them with the Republican spending cuts and we might stop the out of control spiral. As it is now, Democratic spending cuts are not enough and Republican tax increase aren't enough.
The leaders in Congress are TRYING to sabotage any agreement.
I am getting paid Friday and 12% plus will be going as Social Security Tax. Yet, the first that gets cut in the debt ceiling theatre is Social Security to my mom & dad. Does not sound like the government has its priorities straight. Why would you give more money (increase revenues) to such an entity?
The two most expensive things that we're borrowing money for?
1. The unaffordable Bush tax cuts for the wealthy
2. The never-ending wars in Iraq and Afghanistan (which Bush kept off-budget--I guess because they were free, and Republicans didn't care about deficits back then?)
Sibby, we get it. You hate government. It can't do anything right. Blah blah blah. That being the case, why don't you move to the libertarian paradise that is Somalia? Extremely limited government. Low/nonexistent taxes. It ought to be heaven on earth for a true-blue, anti-government conservative!
I completely agree with Sibby on Social Security. Completely.
Okay, let's blame Bush for the deficit. Blame him for the default. Blame him for the housing slump. Blame him for the depression (if we have one coming). Blame him for the assassination of Abraham Lincoln, the fall of the Roman Empire, the crucifixion of our Lord Jesus Christ. Blame, blame, blame. Blame until the world's aflame.
Now what?
Now, Stan, recognizing the policy choices that got us into this mess, we can focus on undoing those policy choices.
The problem for Obama is that people were tired of large government spending before he took office. They were tired of Bush. Obama really didn't campaign as a big spender and people viewed Bush as a conservative (which is not true economically).
People wanted a smaller Government but didn't want Republicans in 2008. 2010 the people wanted a smaller Government and voted once again against the incumbent party.
I honestly can't tell whether I agree with Sibby on Social Security or not. If the argument is that Social Security has nothing to do with the deficit, is completely solvent, and should in no way be part of the discussion of cuts, then I totally agree. If the argument is boilerplate about the government being inefficient, that Social Security is in trouble, etc., then I disagree.
Also: Government spending did not increase under Obama, all the conservative disinformation notwithstanding. See the Forbes article: http://www.forbes.com/2009/01/19/obama-bush-spending-oped-cx_kh_0119hassett.html
Note that Mexico is not on this list. Let's offer them Statehood now.
We borrow 40% of what we spend...We are ALL to blame for demanding services and entitlements our gov't cannot afford to provide without borrowing money. There is no end to deficit spending in sight. EVERYTHING will suffer some sort of cut. It does not really matter how beneficial any one program will be. We can't continue to spend money that we don't have at a rate that has only been accelerating.
If you sat down and looked at how much we are going in the hole and what it will take to dig us out, you would be very discouraged. This can't be fixed without draconian cuts and much higher taxes than any politician would conceive.
Larry:
Mexico as another U.S. State? (Or its states as new U.S. states?) An interesting idea. Would Mexico say "Yes" if we offered them such a deal?
I wonder ... if we legalized pot (so we could tax it -- what a concept!) and made Mexico's provinces into states of ours, and if we also decriminalized small amounts of some of the other drugs, what would the drug cartels do for business?
More on topic, I should clarify that Cory is right (in his response to my comment earlier). It's just that the blame game does nothing anymore. Noting Bush's mistakes, we might better undo them. And, although I get tired of hearing people blame Bush for our current mess, I have to confess that I think he really is largely to blame. The trouble is, after a certain length of time, mere finger-pointing and bad-mouthing will get liberals nothing more than derision on the part of most Americans, and rightly so.
It's states should be counties in a new State with two senators and a requisite number house members and an economy about the size of California's. The Canadian provinces could be States in due time.
I don't want to tax weed, Stan. Cannabis law should look like beer homebrewing or hobby winemaking does.
How will a sharp reduction in federal aid to SD affect our current year's budget? Will we need a special session to deal with the shortfall it will cause?
Subsidies for ethanol production is not so much 'aid' as it is stimulus and won't be reduced to states like South Dakota, Montana, or Wyoming, Mike; that's a fear tactic perpetrated by the GOP earth haters. The Noem/Rehberg/Lummis wing of their party will just change the appearance of 'aid' to look more like job growth so expect the extractive industries to get more earth to scorch.
You can bet that Ellsworth, Warren, and Malmstrom will continue to rain death upon children of color in far-off lands.
Chris, S. yes, I see what you mean. There is a good argument to be made that to the extent the Government has borrowed from the SS trust fund (to the tune of $2.6 trillion or so) those funds should be paid back. If that means clawing back money from tax cuts to the wealthy, so be it. Sibby might not agree with that part. But you never know. He might. Whaddya say, Sibby?
I'm not talking about ethanol. Federal funds for education, Medicare, Medicaid, Indian Health Services and road construction are definitely going to take a huge hit after August 2nd. If the feds pay out 50 cents on the dollar, where will that leave our state budget for the current year?
Ain't gonna happen, Mike.
If a deal was going to happen, it would've happened by now. Both sides are dug in and ready for a long fight.
Food stamp use is on the rise in the chemical toilet. Should South Dakota continue to enjoy the $1.59 it receives from the Feds for every buck it sends to DC to subsidize living where humans should flee when it's -35? Why should people be paid by the Feds to do that, Mike?
The Farm Bill is the next policy push.
Larry...All legislation will be constrained by the lack of money. Treasury will make the decisions about who is paid and in what order without laws setting priorities about importance.
Bill,
If we want the libertarian government that was created by the Constitutional Convention, then Social Security taxes should be returned to those who were robbed and then give all working class employees a 7% pay raise by cutting the payroll tax and give all business a 7% tax cut on their labor costs. Then watch the economy explode. If we are going to raise the debt ceiling we might as well do it to return freedom to the people.
Then, the medical industry will continue to bank on spiking disease rates throughout the US. State environmental regulators will suffer while law enforcement and prisons benefit.
Are you stuck living in South Dakota, Michael? Are your neighbors obese because they're barricaded in their homes because it's too hot or too cold and drive to Sioux Falls to buy more useless plastic crap out of boredom?
We have millions of retirees depending on their money held in trust by the US to pay for their monthly bills during retirement.
Yeah, they're living in RV parks in Madison and Spearditch skewing elections.
You too will get old someday.
That's a solid way of looking at it, Sibby. Nice work. I'm going to have to think that all the way through. Are you a Ron Paul fan?
Fleming and Sibby are older and smarter than i am, Michael. The President is the head of my party and turning Montana into a blue state before i'm old is my focus.
Rewild the West.
Those Christian right, personal responsibility is most important types, do not want to take responsibility for their own greed. I am a Christian but do not like this hypocricy in other Christians. I get to hear from non Christians on the left that those Christians are wrong. Those on the right can talk to their friends and feel good. I do not like seeing Christians bashed nor will I defend wrong.
Bill,
I voted for Ron Paul in the 2008 primary. I don't agree with his view on some social issues, but I understand his arguments. I respect that he is not an Establishment hack.
Cory, maybe you could do a post on the SS Trust fund sometime? Both Sibby and I are concerned that it is getting short shrift in the current debt ceiling debate. Speaking of, have you seen this chart?
http://www.whitehouse.gov/blog/2011/07/26/infographic-where-does-our-national-debt-come
Bill,
If you read my other comments made on this web site, I hope you would look a the chart and conclude...both parties are responsible for the debt. And perhaps we should take it a step further and blame ourselves for letting them do it. Perhaps we should think twice before considering federal money as being "free" money.
Bill and Cory,
Perhaps the first thing we should look at is the amount of debt it would take to pay back every dime that living Americans have paid into the SS Trust fund.
JeniferSDPB Jenifer Jones
Sen. Thune says Congress will agree on budget plan in time to raise debt ceiling tinyurl.com/3bcpahn
I agree, Sibby. I read somewhere it was at least $2.6 trillion. The White House chart seems to have it closer to $4 trillion if I'm reading it right. What's your number?
Bill,
My number is zero, if benefits can't be paid unless the debt ceiling is raised. I got a report on all taxes I and my employers have paid since the beginning. My question is; what is the total for all "living" Americans? I would be happy to get mine back now, and I won't even ask for interest.
Yes, that's what I meant, Sibby, the National number, not your personal number.
http://www.ssa.gov/oact/progdata/assets.html
$2.6 trillion, Sibby.
From what Iv heard “it’s the jobs stupidâ€. Well what can we do to fix something so obviously broken. This is from a poor dumb dog trainer so if its not right that could or maybe not be the reason.
1. Cut 3.5 in spending cuts right now. I have no idea where that figure came from but it sure has been thrown around a lot lately.
2. End both wars. These countries will be exactly the same when we leave as when we got there, no different. We did not bring democracy to these countries and we never will. All they have done is cost us money and more importantly the lives of our young men and women. IMO the biggest subsidy that we are giving the big oil company is the use of our military to protect their interest and it should stop.
3. Cut back on at least half of the out of country bases and redirect our military in a new way to protect our own home land.
4. Close the loop holes in the tax code to stabilize and grow the economy. Then when the tax cuts come due let them expire. Lets face reality here if they were going to work it would have happened by now. It will be ten years and that’s enough time for a failed experiment to get a chance at success.
5. Rebuild social security by paying back what has been stolen from its coffers a little at a time and make it so it can never happen again.
6.Actually put a jobs program on the floor of the house. That was why the new people were put in there. It wasn’t to plot the overthrow of the president and not to “just say noâ€. “It was the jobs stupidâ€.
One way to do this would be by starting programs like the old Civilian Conservation Corp, Put people to work doing just about anything from thinning trees to stop infestation. Or cutting trails through national forest for new power lines. Or fixing things in the towns and cities that overpriced contractors are rapping the government for. Some could be pencil pushers, some could be engineers, and even doctors. There are plenty that are out of work that would really like to say they are doing something.
Sure it would come at a price but it would put people back to work and that in turn would stimulate the economy. When these people are paid don’t ever charge a tax on money earned from their CCC work. If they work for so many years give them “work credits†that could be used in one of two ways but not both. First they could use the credits to rebuild their credit ratting, even if they had filed bankruptcy in the past the proof of hard work would count for something. Those with great work ethics would make credits and those that didn’t would get laid off! Second they could use the work credits for low interest 30yr loans to in turn leverage bigger sums of money from cash bloated banks. We would need more bank regulations, not less, for this to happen. This money could never be used for homes or debts but only for business opportunities. Just look at how many businesses were created by the CCC, the WPA, and TVA after their projects were completed when they were used for that purpose. This time lets not stop these programs but continue them for the generations to come. There are always going to be good people that need to rebuild their lives and this would be one way of doing it.
I know, I know it would be tough to get through especially right now with the congress critters we have in DC but sooner or later they are all going to have to answer to their voters why they have been screwing around when they should be taking care of the one problem that everyone agrees with.
IT’S THE JOBS STUPID!
The Blindman
Bill D., you've got a little Ron Paul coursing through your veins on foreign policy. Or is that Dennis Kucinich? :-)
On the CCC: Holy cow! Let me get my boots, and hand me a chain saw! I'll sign up tomorrow to spend a few months in the Black Hills taking down beetled timber. That would be darn good work!
"...a little Ron Paul coursing through your veins on foreign policy. Or is that Dennis Kucinich?" Exactly, Cory. On some things it's hard to tell the difference. War for example.
...and work.
Yes I like both men a little. Its like having two mentally challenged uncles that live in the nut house.
First you stop in to visit Uncle Ron and everything is just going fine for the first ten minutes. Then a shadow crosses the room from a bird flying outside the window and its like somebody twisted his spring to tight and he goes crazy.
Then you head on down to Uncle Dennise's room to see how he's doing , and just when he is making some sense a big nurse comes in and gives him a handful of Quaaludes. He doesn’t stop talking but you have to leave because he is boring you to death.
Everyone has at least one crazy relative, some even more.
The Blindman
Ron Paul would not go for the CCC. And I believe Mr. Dithmers point 5 supports my belief the the SS Trust fund is zero.