The truth behind the nation’s massive fiscal problem

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Political narratives are precious things these days. They give people a story line, an explanation for why the world is as it is and why their side isn’t to blame. And at the moment, the right’s most important narrative is that the nation’s dangerous and unsustainable budget deficit is the fault of Barack Obama.

Well, it isn’t, as the chart on the right demonstrates. “Together with the economic downturn, the Bush tax cuts and the wars in Afghanistan and Iraq explain virtually the entire deficit over the next ten years,” Kathy Ruffing and James R. Horney conclude in a study published by the Center for Budget and Policy Priorities.

The CBPI is a liberal policy-analysis group, and those who are more interested in preserving their faith in conservative narrative than in discovering the truth can and will dismiss its findings on those grounds alone.

But numbers are numbers. If the numbers driving this chart are “liberal,” if the assumptions behind those numbers are “liberal,” then it should be possible for conservatives to explain how and where they’re wrong. The center “shows its work,” as our math teachers used to say, which should make it possible for others to come along and rebut it.

Take, for example, the impact of the economic downturn on the deficit. As the CBPI report notes, the Congressional Budget Office issued projections on Jan. 7, 2009 — two weeks before President Obama even took office — putting the 2009 deficit at well over $1 trillion.

“The recession battered the budget, driving down tax revenues and swelling outlays for unemployment insurance, food stamps, and other safety-net programs,” the CBPI reports. “Using CBO’s August 2008 projections as a benchmark, we calculate that the changed economic outlook accounts for over $400 billion of the deficit each year in 2009 through 2011 and slightly smaller amounts in subsequent years. Those effects persist; even in 2018, the deterioration in the economy since the summer of 2008 will account for over $250 billion in added deficits, much of it in the form of additional debt-service costs.”

Significant tax cuts enacted in a time of war — the first time in U.S. history that such cuts have been enacted — also had a predictable effect:

“Just two policies dating from the Bush Administration — tax cuts and the wars in Iraq and Afghanistan — accounted for over $500 billion of the deficit in 2009 and will account for almost $7 trillion in deficits in 2009 through 2019, including the associated debt-service costs. (The prescription drug benefit enacted in 2003 accounts for further substantial increases in deficits and debt, which we are unable to quantify due to data limitations.) These impacts easily dwarf the stimulus and financial rescues. Furthermore, unlike those temporary costs, these inherited policies (especially the tax cuts and the drug benefit) do not fade away as the economy recovers.

Without the economic downturn and the fiscal policies of the previous administration, the budget would be roughly in balance over the next decade. That would have put the nation on a much sounder footing to address the demographic challenges and the cost pressures in health care that darken the long-run fiscal outlook.

Of course, what happened in the past doesn’t get President Obama off the hook for what happens next. If Obama did not create this problem, he will certainly be judged on whether and how he gets us out of it. Ruffing and Horney also acknowledge that fact.

“While President Obama inherited a dismal fiscal legacy, that does not diminish his responsibility to propose policies to address our fiscal imbalance and put the weight of his office behind them,” they write. “Although policymakers should not tighten fiscal policy in the near term while the economy remains fragile, they and the nation at large must come to grips with the nation’s long-term deficit problem.”

That’s going to require both serious budget cuts and significant tax increases, neither of which will be politically popular. But after the G-20 summit in Toronto, Obama noted that a bipartisan deficit-reduction commission that he appointed is expected to produce its report this December, setting the stage for real debate.

“I’m doing it because I said I was going to do it,” Obama said. “And I think it’s the right thing to do. And people should learn that lesson about me, because next year when I start presenting some very difficult choices to the country, I hope some of these folks who are hollering about deficits and debt step up, because I’m calling their bluff. And we’ll see how much of that — how much of the political arguments they’re making right now are real, and how much of it was just politics.”

451 comments Add your comment

Nothing is Free

June 29th, 2010
9:53 am

No Jay. It was not Bush’s fault.

A full year after the Democrats took over Congress the economy was still strong.

And who are you trying to convince? Your puppets here would agree with whatever you say and the thinking people here know what a load of crap this is.

But please, keep whining and blaming it on people that haven’t been in Washington for years.

Maybe that will work. There just might be enough half wits out there to believe you.

Lord Help Us

June 29th, 2010
9:54 am

Facts have a ‘liberal’ bias…

Lord Help Us

June 29th, 2010
9:54 am

‘A full year after the Democrats took over Congress the economy was still strong.’

We are dealing with ignorance…

jt

June 29th, 2010
9:55 am

Thank God, more and more people are ignoring these G-20 clowns.

Paul/Napolitano 2012.

Nothing is Free

June 29th, 2010
9:55 am

JAy

Here’s a clue. Find a report that actually takes in account the fact that the Democrats took over Congress when the economy was strong as hell.

TAKE RESPONSIBILITY FOR THE JOKE YOU ELECTED AND STOP TRYING TO BLAME PEOPLE THAT HAD A STRONG ECONOMY.

USinUK

June 29th, 2010
9:55 am

dangitall LHU – 9:54 – you beat me to it.

USinUK

June 29th, 2010
9:56 am

“Democrats took over Congress when the economy was built on sand”

there. fixed yonder typos, Hyperbole Boy.

joan

June 29th, 2010
9:57 am

Obama keeps hiring more public sector employees to “study” things and “recommend” things. He is a one man employment agency for more government employees. I am all for cuts in government spending. I note that at the G-20 Obama had his head handed to him because the Europeans who have big government employee/union problems have learned that you can’t climb out of a financial crisis by spending more money. And Obozo wants to keep on spending. We can’t afford it. And he maintains the longest running war in history–question is why? Stability in Afghanistan? That is insane and everyone knows it. Chop some of those government employees and cut their pensions. Do it now, not later.

getalife

June 29th, 2010
9:57 am

Both parties are to blame.

Nothing is Free

June 29th, 2010
9:58 am

Lord Help Us

Last year Republicans held Congress. Unemployment 4.7%

First year after the democrats took over. Unemployment 5%

So is posting your own numbers too much to ask or is just this idiotichabit of yours of just saying “no it isn’t the best you can do, yet again?

ty webb

June 29th, 2010
9:58 am

come on people, this democratically controlled congress you speak of simply had a “dalliance” with budget issues. Didn’t you get the memo?

dougmo2

June 29th, 2010
9:59 am

Jay please tell us when the democrats in power will start accepting blame for their (in)actions? Oh, I’m sorry, that would mean that they would have to accept some personal responsibility. We all know that’s not going to happen.

Nothing is Free

June 29th, 2010
9:59 am

USinUK

**there. fixed yonder typos, Hyperbole Boy.**

This is one of the better arguments that libs have posted today. You must be really proud.

@@

June 29th, 2010
10:00 am

I’ve never had a problem with being taxed in the interest of national defense as long as the money goes towards that end. Never gonna be able to predict or stop aggression…best be prepared with money in the bank.

Obama is more than welcome to call the bluff before he falls off of it.

Jay

June 29th, 2010
10:00 am

NiF, no economist — not even conservative economists — would buy your argument. Not a single one. Your theory is laughable, but you need to keep believing it so you do.

Joe

June 29th, 2010
10:00 am

Kathy Ruffing and James R. Horney: “Together with the economic downturn, the Bush tax cuts and the wars in Afghanistan and Iraq explain virtually the entire deficit over the next ten years,…”

Don’t forget Medicare Part D and agricultural subsidies (welfare for millionaires).

Nothing is Free

June 29th, 2010
10:01 am

dougmo2

**Jay please tell us when the democrats in power will start accepting blame for their (in)actions? **

As soon as they can actually become effective leaders. in other words, never, never will be, never can be.

Lord Help Us

June 29th, 2010
10:01 am

NIF, show me what Congress did between Jan, 2008 and August, 2008 that caused the economy to collapse…or consider yourself…ignorant.

Thanks in advance…

Nothing is Free

June 29th, 2010
10:03 am

Jay

So yet another liberal that doesn’t post any reliable facts, just says that I am wrong. Brilliant,Einstein.

Nothing is Free

June 29th, 2010
10:04 am

Lord HElp Us

I would first need to educate you as to when the Congress flipped to the democrats and educating you is far beyond what I would want to tackle.

Jay

June 29th, 2010
10:04 am

Well, let’s try a little responsibility experiment, shall we?

NiF, DougMo: Would you accept significant tax increases matched by significant cuts in government programs as a way to correct our longterm fiscal problems?

USinUK

June 29th, 2010
10:04 am

“This is one of the better arguments that libs have posted today. You must be really proud.”

looks like someone needs to learn the difference between causation and coinkidink.

we’ll keep a light on for ya, Hyperbole Boy.

Lord Help Us

June 29th, 2010
10:05 am

NIF, ‘I would first need to educate you as to when the Congress flipped to the democrats…’

I just told you…

Waiting on your answer to my 10:01…

USinUK

June 29th, 2010
10:05 am

LHU – 10:01 – but … but … but … MINIMUM WAGE!!! :roll:

John

June 29th, 2010
10:05 am

The federal government needs the Dave Ramsey plan… I imagine baby step 2 will take a while.

Nothing is Free

June 29th, 2010
10:08 am

JAy

No I would not.

The government is reactionary. It does not create wealth for anyone except politicians and government workers.

The private sector creates wealth and they do this by growing their business. They do this when they can turn a profit. The more people they hire, the more taxes are increased because more people are paying taxes.

It’s called capitalism. When the economy has power, the tax base goes up.

THE GOVERNMENT CANNOT FIX THIS. IT CAN ONLY GET OUT OF THE WAY.

Kamchak

June 29th, 2010
10:08 am

Fannie, Freddie, CRA, ACORN—it’s all their fault!

Just thought I would get that out of the way early.

@@

June 29th, 2010
10:09 am

Didn’t get to comment on the thread downstairs. Pedophilia should be a capital offense. If the priests are found guilty, give ‘em the death penalty, and that goes for any child molester.

Death sentence…done and over.

Nothing is Free

June 29th, 2010
10:10 am

Lord HElp Us

Wait until you learn enough to ask a valid question. While you are at it, hold your breath until you can learn enough to ask a valid question.

Joe

June 29th, 2010
10:10 am

Kathy Ruffing and James R. Horney: “…policymakers should not tighten fiscal policy in the near term while the economy remains fragile,…

Hear, hear.

In fact, policymakers should relax fiscal policy in the near term while the economy remains fragile. Contrary to the current meme, when business and families are tightening their belts, government should be loosening its belt to plug the hole in the economy created by the private sector.

In short, we need more stimulus until we approach something resembling full employment. If we don’t put people back to work, revenues will continue to flatten or even decline leading to even higher deficits in the future. If we ever hope to reduce or eliminate the deficits again (much less, pay down the debt), then jobs should be our number one priority today.

Lord Help Us

June 29th, 2010
10:13 am

NIF @ 10:10

Nice dodge…if you can’t answer my 10:01, just say so…

Jay

June 29th, 2010
10:14 am

NiF would not accept a combination of tax cuts and spending cuts to correct this problem.

Even though, politically and as a matter of sheer arithmetic, that is the only possible way to fix it.

Doggone/GA

June 29th, 2010
10:15 am

“if you can’t answer my 10:01, just say so…”

Awww…give him a break. He’s having so much fun proving Jay’s assertion: “those who are more interested in preserving their faith in conservative narrative than in discovering the truth can and will dismiss its findings on those grounds alone”

Lord Help Us

June 29th, 2010
10:15 am

NIF’s definition of an invalid question?

A question which the answer would illustrate just how ignorant he is…

Soothsayer

June 29th, 2010
10:16 am

“Hello, I’m Mr. Horney!” If only I had that guy’s name.

Well, Jay, you ought to know by now that we have to have a war and spend all that money on war stuff so that the people who make all that war stuff can live high on the hog. And especially so that the money they spent buying their very own politicians will not have been wasted. The United Corporations of America.

Deficit? Those are caused by Social Security and Medicare and welfare . . .

pat

June 29th, 2010
10:16 am

Let’s ignore the fact that revenue increase 20% as a result of the Bush tax cuts. Let’s ignore the fact that in less than six months obama increased the debt by 1.2 trillion dollars, for nothing. Let’s ignore the fact that the main economic indicator unemployment is still unnaturally high. Let’s ignore the fact that the stimulus did far less than a tax moratorium would have. You cannot spin your way out of the truth.

Both wars together still don’t add up to the cost of the stimulus.

It would have been cheaper to buy each of the 31 million people w/out insurance a private ‘Cadillac’ than that joke of a reform that’s going to drive health care costs even higher.

Obama has a huge culpability in the deficit and a precious little to show for it. You can only blame others so long before you look inept.

There’s your freakin’ truth.

Nothing is Free

June 29th, 2010
10:16 am

Lord Help You

Not a Dodge. You want me to answer a question that does not consider the real reasons for the situation. Our government began to fail when the Democrats took over in 2007. You want me to address what happened in 2008.

Again, until you learn how our government works, there is no valid question to answer.

The only real question is how long will you continue to act like a spoiled child.

Gordon

June 29th, 2010
10:16 am

Where are entitlements in this discussion? The unfunded liabilities of Social Security and Medicare make the current debt look small. Without complete entitlement reform, it doesn’t matter what else we do.

Also, is it reasonable to assume that the lower tax rates from the Bush tax cuts have absolutely no positive effect on economic growth? None whatsoever? Where did all that money go?

Marko

June 29th, 2010
10:18 am

Since Congress traditionally spends $1.26 for every $1 in new taxes it enacts, increasing taxes (the Democrat and Bookman knee jerk response) obviously won’t solve the problem.

Nothing is Free

June 29th, 2010
10:18 am

Jay

What are you talking about? Tax increases do not spur economies.

Lord Help Us

June 29th, 2010
10:19 am

NIF, ‘Again, until you learn how our government works, there is no valid question to answer.’

Now in addition to showing your ignorance on all things fiscal, you are showing your ignorance about when elections are held and when representatives actually take office.

Maybe you should stop digging…

Dave

June 29th, 2010
10:19 am

Business leaders say Obama’s economic policies stifle growth

By Lori Montgomery
Washington Post Staff Writer
Wednesday, June 23, 2010

“The chairman of the Business Roundtable, an association of top corporate executives that has been President Obama’s closest ally in the business community, accused the president and Democratic lawmakers Tuesday of creating an “increasingly hostile environment for investment and job creation.”

Ivan G. Seidenberg, chief executive of Verizon Communications, said that Democrats in Washington are pursuing tax increases, policy changes and regulatory actions that together threaten to dampen economic growth and “harm our ability . . . to grow private-sector jobs in the U.S.”

“In our judgment, we have reached a point where the negative effects of these policies are simply too significant to ignore,” Seidenberg said in a lunchtime speech to the Economic Club of Washington. “By reaching into virtually every sector of economic life, government is injecting uncertainty into the marketplace and making it harder to raise capital and create new businesses.”

Kamchak

June 29th, 2010
10:20 am

Obama has a huge culpability in the deficit and a precious little to show for it.

But…but…but…Cheney said that Reagan proved that deficits don’t matter.

More freakin’ truth.

Nothing is Free

June 29th, 2010
10:21 am

Lord Help Us

The Elections were held in 2006 and the Democrats took over congress of Jan. 2007.

And apparently your best defense is acting like a spoiled child.

Hey Pal. it ain’t working. You still look like a fool.

Richard L

June 29th, 2010
10:22 am

While its true that the massive deficit started as Bush’s fault, that is no longer the case. Its Obama’s watch now. Any growth past what the deficit was when he came into office is his fault. Fixing the issue is his problem. How much has the deficit gone down since he came into office?

Kelly

June 29th, 2010
10:22 am

LHU, it’s pretty simple here. Democrats won control of both houses in November of 2006. They took office in early 2007. NOT 2008, as you referenced.

Joe

June 29th, 2010
10:23 am

Our government began to fail when the Democrats took over in 2007.

In the Congress that began in ‘07, the House passed bill after bill after bill after bill only to see the Republicans in the Senate filibuster nearly everything (they broke all time filibuster records—only to break them again in the Congress that convened in ‘09). You can’t blame the Dems when the Republicans wouldn’t allow an up or down vote on any and all legislation.

TaxPayer

June 29th, 2010
10:23 am

So, there should be no problem getting rid of the military since it is just part of that big bad government that is in the way of the BPs and Monsantos, etc. That one move will almost wipe out our deficit spending problem.

pat

June 29th, 2010
10:23 am

Hell, all the taxes I pay could not cover the cost of Nasty Pelosi’s new office for one month. If you doubled my taxes, I still couldn’t pay for Nasty Pelosi’s new digs.

Lord Help Us

June 29th, 2010
10:24 am

NIF, oops, my bad and sincerest of apologies.

Dems took over in Jan, 2007.

I will still ask the question though…

What did the Dem Congress do between Jan 2007 (while GWB was still in office and could veto anything) that led to the economic collapse in August 2008?

Gordon

June 29th, 2010
10:26 am

The problem we have is that America hasn’t decided what it wants to be when it grows up. We tax like we want to be free men and women, and we spend like we want the government to take care of all our problems.

booger

June 29th, 2010
10:26 am

Any attempt to project a deficit over the next over the next ten years is absurd, and would only be done to serve a political purpose. Since the much maligned tax cuts are scheduled to end this year anyway, this is basically a hypothetical chart. These exercises are just warm up acts for the real tax increases coming after December. I only mention tax increases because I don’t think anyone really believes we will see significant budjet cuts from this administration.

Joe

June 29th, 2010
10:27 am

Any growth past what the deficit was when he came into office is his fault.

I call B.S. Read the article above: “…the Congressional Budget Office issued projections on Jan. 7, 2009 — two weeks before President Obama even took office — putting the 2009 deficit at well over $1 trillion.

Southern Comfort

June 29th, 2010
10:27 am

The government is reactionary. It does not create wealth for anyone except politicians and government workers.

I agree with your first sentence. The government does not have the appearance to be proactive in many areas, and I believe that’s one of the reasons that the government appears inept in different situations. However, to look at it from another viewpoint, if we had a proactive government, some would probably complain that the government was overreaching or overstepping their power in their actions. That’s a topic I think is worthy of debate.

A far as creating wealth, the highest salaried government worker is the POTUS with an annual salary of $400,000. As far as CEO’s, he probably doesn’t rate in the top 1000 paid in the US. The only way a government worker can create wealth is by using their skills learned in the private sector upon completing government service. I’d have to pull the bs card on that statement.

Outhouse GoKart

June 29th, 2010
10:27 am

Its Bushs fault. Case closed.

TaxPayer

June 29th, 2010
10:28 am

By the way, allowing the Republican tax cuts to expire does not mean that the Democrats will raise taxes. It simply means that the Republican plan of returning to the old tax structure is being followed. So, why would the Republicans complain about following their own plan.

jewcowboy

June 29th, 2010
10:30 am

“A full year after the Democrats took over Congress the economy was still strong.”

With that same logic, 9/11 was solely due to Bush/Republican intelligence failures.

Doggone/GA

June 29th, 2010
10:30 am

“So, why would the Republicans complain about following their own plan.”

Well, you see…that wasn’t REALLY their “plan.” Circumstances interfered. The “plan” was to have a “permanent Republican majority” and they would just keep extending the tax cuts.

Kelly

June 29th, 2010
10:31 am

All of these arguments really come down to one issue: what do you think the role of the government should be?

Conservatives and libertarians believe that the main role of government should be to protect its citizens from harm. That would entail having a military and funding military ventures, police funding, and funding for firefighters. That would also include passing laws that protect one citizen from another. Hence, laws on having car insurance, outlawing murder and rape, etc.

Liberals believe that the government should also be responsible for the welfare and happiness of its citizens (and even those who aren’t citizens). This entails unemployment insurance, welfare, food stamps, affirmative action, etc.

Obviously this causes huge differences in beliefs and priorities regarding government structure and spending. I personally don’t mind funding the military, policemen and firefighters because I feel that it is necessary. I don’t even mind paying for roads. But liberals make up these “rights” as they go in order to create an entitlement society and reliable votes. No person in his or her right mind who receives government benefits is going to vote for someone who wants to reduce them, even though it is right and what’s best for the country as a whole. Thus, our present situation.

Fix-It

June 29th, 2010
10:31 am

I look at that chart and the only thing I can think is, I am so glad that we have the dimacrats in office because they can predict the future. NOT, there is only one way to reduce the deficit, spend less than you take in! Why is it that our elected officials can’t seem to balance a budget, doesn’t every American have to do that every day? If they do not know how to do simple math vote them out!!!!!

Kamchak

June 29th, 2010
10:32 am

jewcowboy

How have you been?

Bombshell McGhee

June 29th, 2010
10:33 am

bush lied, soldiers died…

Gator Joe

June 29th, 2010
10:33 am

Jay,
The blunders of the most recent Bush administration are, and continue to be, responsible for our current economic situation. As you suggest, spending cuts (in the largest areas of the budget), or increased taxes applied to the deficits and the debt, or a combination of both are the only way back to solvency. The Conservatives and their more extreme counterparts, mistakenly believe, drastically cutting welfare and similar programs will solve the problem.

Defense, Medicare, and Social Security are where most of the budgetary spending occurs. Who wants to be first in line to cut Grandma’s or Grandpa’s Social Securtiy, Medicare, or Military retirement benefits?

Southern Comfort

June 29th, 2010
10:34 am

Kelly

Lemme guess…. you’re a conservative, right?

jewcowboy

June 29th, 2010
10:36 am

Kamchak,

Howdy…crazy busy with work lately…when it rains it pours :) Lately I only get to do drive-by’s on here. How is everything with you?

Dave

June 29th, 2010
10:36 am

Tax Hikes and the 2011 Economic Collapse
Today’s corporate profits reflect an income shift into 2010. These profits will tumble next year, preceded most likely by the stock market.

“On or about Jan. 1, 2011, federal, state and local tax rates are scheduled to rise quite sharply. President George W. Bush’s tax cuts expire on that date, meaning that the highest federal personal income tax rate will go 39.6% from 35%, the highest federal dividend tax rate pops up to 39.6% from 15%, the capital gains tax rate to 20% from 15%, and the estate tax rate to 55% from zero. Lots and lots of other changes will also occur as a result of the sunset provision in the Bush tax cuts.

Tax rates have been and will be raised on income earned from off-shore investments. Payroll taxes are already scheduled to rise in 2013 and the Alternative Minimum Tax (AMT) will be digging deeper and deeper into middle-income taxpayers. And there’s always the celebrated tax increase on Cadillac health care plans. State and local tax rates are also going up in 2011 as they did in 2010. Tax rate increases next year are everywhere.

Now, if people know tax rates will be higher next year than they are this year, what will those people do this year? They will shift production and income out of next year into this year to the extent possible. As a result, income this year has already been inflated above where it otherwise should be and next year, 2011, income will be lower than it otherwise should be.

Also, the prospect of rising prices, higher interest rates and more regulations next year will further entice demand and supply to be shifted from 2011 into 2010. In my view, this shift of income and demand is a major reason that the economy in 2010 has appeared as strong as it has. When we pass the tax boundary of Jan. 1, 2011, my best guess is that the train goes off the tracks and we get our worst nightmare of a severe “double dip” recession.”

Peadawg

June 29th, 2010
10:36 am

LMAO! Another “It’s Bush’s fault” thread. Trying to sweep Obama’s failures under the rug again, Jay? Hilarious!!!

RW-(the original)

June 29th, 2010
10:37 am

Clearly this is a chart of the oil spill and somebody has just tacked some numbers onto it, but why are the “Bush tax cuts” playing such a big part in the future years when they mostly expire after this year?

jewcowboy

June 29th, 2010
10:37 am

Taxpayer,

“So, why would the Republicans complain about following their own plan.”

That would assume that Republicans actually had/have a plan…

Halftrack

June 29th, 2010
10:37 am

Jay; If you would open your eyes, ears and mind to what is going on in the world, you would see that even the EU socialist realize that they have to cut spending. Think with some common sense, You’re going to charge more on your credit card to stimulate yourself out of debt? The private sector is the group that provides the money to run the government. The economy is now that government owes salaries more than the income from the private sector produces. Small business’s can not borrow money to expand, or do things to produce job openings. The common American has not been helped by any of Obummer’s administration polices or new laws yet. Are you better off today than you were at the end of Bush’s term as president? In 2011 all of the old tax cuts jump up to higher levels, plus some new added ones. Go figure and doodle on some soft rolled paper.

USinUK

June 29th, 2010
10:38 am

Kam – how have YOU been??? sorry about your boys …

Jay

June 29th, 2010
10:38 am

Pat writes in his opening statement:

“Let’s ignore the fact that revenue increase 20% as a result of the Bush tax cuts. ”

Let’s not ignore the fact that his statement is a lie, plain and simple, a fabrication created so that Pat and others like him won’t have to face the truth.

Here’s the truth:

In 2001, when Bush took office, federal revenue was $2.2 trillion. It did not reach that level again until 2006, five years later. It peaked in 2007 at $2.4 trillion, an increase of less than 10 percent over a six-year period. When Bush left office in 2009, total federal revenue was less than it was the year he took office. (All numbers in constant 2005 dollars, to account for inflation.)

For comparison’s sake, let’s look at government revenue under Bill Clinton. In 1993, when he took office, it was $1.5 trillion. By 2001, when he left, it was $2.2 trillion, an increase of close to 50 percent (again, in constant 2005 dollars, to take out the effects of inflation.)

Those are the facts; that is the truth, the kind of thing you discover when you cite historical sources rather than hysterical sources.

Lord Help Us

June 29th, 2010
10:38 am

NIF, while you are struggling to answer the actions of the Dem Congress between Jan, 2007 and August 2008 that led to economy to crash, maybe you can add this little ditty to your research.

What did the GOP Congress do to FIX the economy when they had control between Jan, 1995 and Jan, 2007?

Thanks in advance…

Doggone/GA

June 29th, 2010
10:38 am

“but why are the “Bush tax cuts” playing such a big part in the future years when they mostly expire after this year?”

If you have a huge credit card debt…does it automatically go away if you get a small raise in salary?

Kelly

June 29th, 2010
10:38 am

haha

It really doesn’t matter. I feel that what I presented (at least the analysis of spending beliefs) was pretty objective. That is one of the main differences between the fiscal beliefs of conservatives/libertarians and liberals. As long as we continue to disagree on what the role of government should be, there will be no compromise. The problem is that one group of individuals (namely those who receive government benefits, whether it be welfare, unemployment, Medicare, or SS) has zero incentive to vote for people who want to cut one of the biggest parts of our budget. It only makes sense, if you understand human behavior. And the more people who become dependent on the government, the fewer the people who will look at the situation objectively and do what’s best for the country as a whole.

Bill McNeeley

June 29th, 2010
10:39 am

This article illustrates the maxim, “There are three kinds of lies: lies, damned lies, and statistics.” (Mark Twain).

A private sector employee

June 29th, 2010
10:40 am

As always, the point is what is Obama doing about the CURRENT deficits, CURRENT unemployment, CURRENT oil spills.

Obama gets a pass for the first year…

….. and then he has to take the fall for continuing huge unsustainable deficits, entrenched unemployment that was supposed to be solved by a trillion in stimulus spending, rising medicare costs that were supposed to be tamed by cuts that have not materialized, and for a failing war in Afghanistan that he has pretty much neglected.

If my wife charges up our credit cards, I can’t blame her if I then max them out. Bush charged up the nation’s credit card, and Obama is maxing it out. Obama doesn’t get by with saying, “well Bush charged it up so I HAVE to max it out”.

Kamchak

June 29th, 2010
10:41 am

jewcowboy

Pretty good with me. Mom’s in the hospital and I am going to see her today. I noticed a late night post of yours several days ago about trippin’ over shoes and I haven’t seen much from you since.

Recovering from a loss takes time—don’t let anyone tell you about how you should be over it by now. Only you can set that schedule.

TaxPayer

June 29th, 2010
10:42 am

Actually, the real Republican plan is to bankrupt the US so the power mongers backing the GOP can step in and pick up everything that they want for pennies on the dollar. They almost pulled it off but GW backed down at the last minute and bailed out Wall Street. That’s why GW is now a party outcast. The Republicans can no longer claim the man as their hero. He cowered when faced with depression.

BADA BING

June 29th, 2010
10:43 am

With all the problems in the country, do you know who the luckiest man in the World is? ……….John McCain. Man, did he dodge a bullet. And the luckiest company?…..Toyota. Have you heard anything about runaway cars since the oil spill began?

DEEP THROAT

June 29th, 2010
10:43 am

Did you hear the story of the Dem and the Rep walked outside of the capital building, it was a beautiful day, not a cloud in the sky, the temperature was moderate. Just one of those days one would like to stay outside all day. The Republican commented on how nice the weather was, the Democrat said he thinks it’ll rain.

Jay

June 29th, 2010
10:43 am

Southern Comfort, government does create wealth. Let’s take the much-maligned TSA, which conducts security checks at airports.

In the aftermath of 9/11, the airlines were close to collapse. Nobody wanted to fly because of security concerns. The federal goverment, through TSA and other means, addressed that problem and allowed privately owned airlines to continue to operate.

One example of many many many.

BADA BING

June 29th, 2010
10:45 am

I will tell you why the country is financial trouble. We lived the high life for the last 3 decades. We lived on borrowed money, and now we are living on borrowed time.

Normal

June 29th, 2010
10:46 am

Outhouse GoKart

June 29th, 2010
10:27 am

…and don’t forget Cheney is EVIL!

Jay

June 29th, 2010
10:46 am

And Kelly, that’s a nice, theoretical description of how conservatives like to think of themselves.

Now remind me again — how did conservatives ACTUALLY behave when they had control of government for so long?

Actually no, don’t remind me. The memories are painfully fresh.

Southern Comfort

June 29th, 2010
10:48 am

Kelly

Purely from an objective point, your original statement attempts to cast conservatives in a good way. You then, use the same thing to attempt to cast liberals in a bad way. If that were not the case, you would have provided information about liberals other than the “(and even those who aren’t citizens).” talking point.

How can one be a conservative who believes in limited government, yet you advocate:
“That would entail having a military and funding military ventures, police funding, and funding for firefighters. That would also include passing laws that protect one citizen from another.”
Much of the military spending we do is not for soldiers as much as it is for systems and equipment that is completely unusable in our current engagements. Anytime a budget crisis happens, police and fire are the first to get the ax (along with teachers).

I haven’t quite figured that about the political factions. They both pay lip service to goups but don’t really have their backs when the chips are down.

Kamchak

June 29th, 2010
10:48 am

USinUK

We made it out of group play, so a better result than four years ago. My major concern has been for the health of current and future Blue Lions. If Jose Mourinho takes the helm a Real Madrid, I’m looking for a major shake-up in Europe especially Chelsea. Drogba and Lamps may be leaving and I don’t see any room for two huge egos at Madrid, so pretty boy is probably coming back to Sir Alex.

Normal

June 29th, 2010
10:48 am

Those are the facts; that is the truth, the kind of thing you discover when you cite historical sources rather than hysterical sources.

Oh Jay, that was too good! Bravo!

Joseph

June 29th, 2010
10:49 am

Great piece in the FT today about how Brazil got its (debt) house in order and is now relatively thriving. The great thing is that we will see how NJ, Indiana, Minn, and other states who are betting that cutting gov’t and cutting corporate taxes will do versus Ca, Ill, and others. Do charts all day long if you want- my money is with the more disciplined. What is interesting from Bookman and Tucker is daily in the AJC are stories of massive govt corruption and waste and guess what, lower income individuals being laid off. You two are being spun like a top by a clown and his joke of a staff. Bush was inept- he is gone- the only recipe is fiscal responsibility.

Matti

June 29th, 2010
10:50 am

The truth exists independently of how we feel about it. I’m so bored with people injecting their feelings and opinions into a discussion in which they’ve already dismissed facts as irrelevant. We cannot begin to enact “what should be” until we deal with what IS.

This mess did not happen over night, and it is not the result of one single idealogical faction’s decisions to the exclusion of others. Blame is abundant, and there’s plenty to go around. But more importantly, effective solutions require more than just shared blame; they require shared responsibility. Hanging on to partisan bitterness is SO NOT HELPING.

A private sector employee

June 29th, 2010
10:51 am

“For comparison’s sake, let’s look at government revenue under Bill Clinton. In 1993, when he took office, it was $1.5 trillion. By 2001, when he left, it was $2.2 trillion, an increase of close to 50 percent (again, in constant 2005 dollars, to take out the effects of inflation.)”

Revenues under Bill Clinton were primarily due to a false stock market bubble.. I bubble that popped and left George Bush with a recession that was further compounded by 9/11. Which is why:

“In 2001, when Bush took office, federal revenue was $2.2 trillion. It did not reach that level again until 2006, five years later.”

It’s misleading to the point of lying to pick and choose your facts like this, Jay. You can fool your progressive myrmidons, but any rational person looking at the economy will know the truth. I could also point out that Clinton’s budgets were “shepherded” by a Republican Congress. Our current Democratic Congress, which writes the budget, has been in control since 2006. Using those two factoids, it is CLEAR that the Republican controlled congress did far better for far longer than the current Democrat controlled Congress. The Congress of Newt Gingrich proved to be FAR superior to the Congress of Nancy Pelosi.

Southern Comfort

June 29th, 2010
10:52 am

Jay

The government did not create the wealth. They created an environment in which the airlines could create that wealth. The government does not operate any airlines, reservation lines, or ticket counters.

Using that, I could say government created Norfolk Southern’s wealth and J.B. Hunt’s wealth since the government was involved with creating the railroads and highways.

Normal

June 29th, 2010
10:53 am

Matti

June 29th, 2010
10:50 am

Hanging on to partisan bitterness is SO NOT HELPING.

Matti,
Good post and I agree.

But it was still Bush’s fault… ;) … And Cheney was evil…

Bosch

June 29th, 2010
10:53 am

And Kelly,

Please explain to us all how you are being objective when you assume incorrectly?

BryanW

June 29th, 2010
10:54 am

It’s funny and sad to see how everyone ignores the point of what Jay wrote and goes off to the races with the usual ideological arguments.
It can be boiled down to this: We have a deficit because of Medicare, Medicaid, defense spending, social security and interest on the debt. Because these are so huge, you could eliminate absolutely everything else the government does and the government would still be in the red. Bush and the GOP cut taxes insisting that it would not add to the deficit. But the deficit went up, right away, and stayed high throughout his entire administration. Anyone who thinks Obama and the Dems are the only ones to blame for the deficit is not a serious person.

Bosch

June 29th, 2010
10:54 am

“And Cheney was evil…”

No Normal – he STILL is. :-)

Dave

June 29th, 2010
10:54 am

Real Jobs Create Wealth

“So creating jobs is not difficult for government. What is difficult for government is creating jobs that produce wealth. Pyramids, holes in the ground and war do not produce wealth. They destroy wealth. They take valuable resources and convert them into something less valuable.

Instead of iPods, great art, cures for diseases and machines that replace back-breaking work, we get the equivalent of digging holes and filling them up.

Under President Obama’s “stimulus” plan, jobs will be created to weatherize buildings, construct schools and wind turbines, and repair roads and bridges. But outside the market process, there is no way to know whether those are better uses of scarce capital than whatever would have been produced had it been left in the private economy.

Since government services are paid for through the compulsion of taxes, they have no market price. But without market prices, we have no way of knowing the importance that free people would place on those services versus other things they want.

So although we’ll see the government putting people to work and even some new schools and bridges, we won’t be able to calculate how much wealth we’ve lost because scarce resources were misallocated by the politicians.

Nevertheless, we can be sure we will have lost. If the government’s projects were truly worthwhile, they would be undertaken by private efforts, and in their quest for profits, entrepreneurs would handle them more efficiently.”

USinUK

June 29th, 2010
10:55 am

Kam – after our diiiiiiiiismal performance, I’m wondering if we’re going to see a shakeup across the board on how our clubs train / bring athletes up through the ranks, etc. There was a lot of chit-chat on the radio about emulating Germany’s system – but that’ll take money and the results won’t be fast …

me, I’m wondering if Capello will survive the week – Redknapp has said he would be interested in the post (hell, for £6M/year, I would be, too) …

more to the point, I’m more interested to see if FIFA is going to install more technology given the TRAGIC referreeing over the last couple of weeks …

http://www.telegraph.co.uk/sport/football/world-cup-2010/7860378/World-Cup-2010-Fifa-president-Sepp-Blatter-apologises-to-FA-over-Frank-Lampard-goal.html

Bosch

June 29th, 2010
10:55 am

“Anyone who thinks Obama and the Dems are the only ones to blame for the deficit is not a serious person.”

But that never really stops the wingnuts here.

Jay

June 29th, 2010
10:55 am

Private Sector, Pat made a verifiable claim that Bush tax cuts increased revenue by 20 percent; I merely proved him wrong. My figures are absolutely accurate.

I also find it fascinating to see you forgive Bush on the grounds that he took office as the internet bubble was bursting, while conservatives absolutely refuse to extend that same forgiveness to Obama, who took office during an economic calamity that makes the internet bubble look like nothing.

Why is that?