The story of today’s deficits starts in January 2001, as President Bill Clinton 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, energyand other areas.
If the analysis is extended further into the future, well beyond 2012, the Obama agenda accounts for only a slightly higher share of the projected deficits.
Good article that's worth your time. What emerges from this piece is a sense that after being left with a huge surplus, George W. Bush seems to have DELIBERATELY SET OUT to blow such a big hole in the federal budget that it would hamstrung all future presidents for generations, making them unable to enact any kind of programs at all.
Barack Obama may have no realistic plan for eliminating the deficit, but neither do Republicans. "Tax cuts" to "create jobs" aren't going to do it. George W. Bush cut taxes for the wealthy time and time again, and unemployment exploded under his tax policies. So can we please stop this "rich people create jobs" nonsense? They had eight years of paying ever less taxes and instead of creating jobs, they created bonuses for themselves. As for spending cuts, let's see Republicans come up with a realistic plan to eliminate the deficit. Elminiate Social Security and Medicare? Go ahead. Propose it. See how far you get, especially among families where one or both breadwinners are unemployed, the savings account they set up for the kids' college has been decimated by the economic crash and their parents have lost most of their retirement savings at the same time. Tell these families that their elderly parents now have to pay all their medical expenses on their own. Then if the other breadwinner loses his or her job, and they start sliding down into poverty, tell them there's no more SCHIP. No more food stamps. No more job retraining. Nothing for them, because "deficit reduction is the only important thing." See how that will fly.
No matter what Newt Gingrich says, Republicans are NOT the party of fiscal responsibility. No one is. Where the parties disagree is where the largesse should go. Democrats tend to put money towards things that improve the lives of, or help sustain, working families. Republicans shovel more cash into the pockets of those who already have more than they could spend in twenty lifetimes, and then make sure that their children get to keep it. And the hell with everyone else.
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