Tuesday, April 20, 2010

What's In A Deficit?

The Clinton years were good to George Bush. Thanks to his predecessor's fiscal policy and the dot com boom, Bush inherited a thriving economy and a budget surplus of $850 billion dollars from a president Republicans had relentlessly labeled as a tax-and-spend Democrat. With an array of options before him -- such as fully funding his own vaunted No Child Left Behind plan -- the self-identified compassionate conservative took a page from Ronald Reagan's playbook and ran up defense spending while pursuing tax cuts that disproportionately favored the wealthy. Two unfunded wars, an economic downturn early in Bush's first term and major recession -- brought on conservative free market orthodoxy -- late in his second term combined to leave his successor with a bleak fiscal picture.

It's a standard Republican talking point that the budget deficit has increased more under Barack Obama than all other administrations. This is garden variety demagoguery, intellectually dishonest legerdemain that, among other things, sets aside the realities of the budget calendar, meaning that much of Obama's first year in office was spent operating under the Bush budget for fiscal year 2009. The New York Times analyzed the deficit and came up with this distribution:

Bush Administration
Surplus: $850B
Early 2000's economic downturn: ($290B)
Bush Policies (tax cuts, Iraq war, Medicare Pt D): ($637B)
2008-09 Recession: ($480B)
2001-2009 Bush contribution to deficit: ($1.407T)
Deficit at close of Bush terms: ($557B)

Bush Policies Continued By Obama
Wall St. bailouts: ($185B)
Continuing programs (Iraq war, AMT patch): ($232B)
Contribution to deficit ($417B)
Deficit after Bush terms and continuation of Bush policies ($974B)

Obama Administration
Stimulus ($145B)
Programs ($56B)
Obama contribution to deficit ($201B)
Deficit Total ($1.712T)

What exactly would the Republicans not have done? We already know that they supported Bush policies in lockstep. What about the Bush policies that Obama continued? After the first vote for the Wall Street bailout failed (which was, according to John McCain, the fault of presidential opponent Barack Obama for putting politics ahead of country), it passed in bipartisan fashion. Republicans have supported the Iraq war from the get-go, so if anything they want more money spent there. And no politician in his or her right mind will support repeal of the Alternative Minimum Tax patch.

Why anyone serious about restraining government spending would support a party whose polices led to 1.824 trillion of spending -- more than the deficit itself -- in return for two failed wars and a major recession is beyond me. But that's been the Republican playbook since Reagan: Buy off the middle class with a modest tax cut, give most of the tax cut to the wealthy, then run up the deficit with  increased defense spending to prevent Democrats from funding social programs.

Who can blame the middle class from thinking that they are overtaxed when it does bear a disproportionate share of the tax burden? But the solution to that does not lie in teabagger rallies and it certainly does not lie with the Republican party. The real answer lies in dramatically cutting defense spending and in reducing the influence of corporatism through such means as public financing of elections, lobbying reform, closing tax loopholes, ending corporate welfare, and raising the corporate tax rate, all in the interests of sharing the tax burden more equitably. But, that takes a lot of work, a lot of complex thought, the disengagement of the Democratic party from its Wall Street funders, and for both parties to wean themselves from their addiction to economically inefficient defense appropriations. For too many people, it's so much easier to hold up imbecilic signs of the president while caterwauling irrelevantly about states' rights and nodding sagely while Mitch McConnell accuses the Democrats of plotting more Wall Street bailouts while hopping in bed with the very people who got us into this mess...

McConnell said with a straight face that to assume that his meeting with hedge fund investors amounted to influence peddling was "quite a stretch." No comment...

Robert Kuttner writes that:
We need a drastic, radical simplification of the financial system. That means breaking up large institutions that are too big to fail, and breaking the rice bowl of ones that add nothing to broad economic welfare and efficiency other than an opportunity for the own enrichment at the general expense.
Hendrick Hertzberg hears a sovereignity echo reverberating from Alabama in 1961...

Today could be a great day for music, with new releases from Shelby Lynne, Trombone Shorty, John McLaughlin, Ozomatli, and new old material from Hot Tuna...

This is interesting:

Do you think that Rove and his supporters were equally outraged last summer when teabaggers disrupted town hall meetings about health care? Just asking, is all...

Well, Massachusetts, you voted for him, you got him...

Hey, Scott: Read the bill!...

Talk about a stand-up guy!...

I don't know, Rush. Can I call a cracker a cracker?...

If the teabaggers ever start singing this one, I'll move to Iceland. Or, as Scrooge said, retire to Bedlam.


Roy said...

Wow! A new (old) Hot Tuna and John McLaughlin out! Two of my fondest youthful memories. It oughta be interesting to hear what McLaughlin is up to these days.

Nice run-down of where the responsibilities lie on the increasing deficit and recession. The spin doctors will shoot it down, though; they're good at that. I just wonder how long it will take the majorty of the American public to see the spin for what it is and do something about it, like throw all the Republicans out of Congress in the next election cycle.

Scott Brown is a total moron. I sincerely doubt that MA voters will put hm back in the Senate n 2012.

It wouldn't surprise me if the teabaggers tried to appropriate "Volunteers..." After all, look how many of the leading lights of the '60s Left went over to the right, starting with Jerry Rubin. Nope, wouldn't surprise me at all; there are an awful lot of old hippies in the new Right.

K. said...

Birds of Fire was the second jazz album I bought, right after Swiss Movement! I saw McLaughlin about fifteen years ago and he was great. As a friend said, "Same old licks, but what licks!"

When the Boston Herald turns on Brown, you gotta think he's in trouble. Hopefully, next time the D's put up a candidate with some in him or her.

People like Jerry Rubin and David Horowitz are the worst of the worst. They sold out their ideals for less than thirty pieces of silver and get put on display on Faux News like Nazi criminals in Stalinist Russia.

Barry and Barbara Knister said...

Remember Ernest "Fritz" Hollings, Democratic senator of South Carolina for almost forty years? He had Reagan pegged (and I believe almost all of Dubya/Rove's playbook was lifted from Ronnie's). Hollings said Reagan had intentionally driven up the deficit in order to deny Democrats their traditional agenda. It's very hard to pursue expensive domestic programs when deficits are exploding. Making use of a pointless war the way Ronnie used a huge military buildup,Dubya did the same thing.

K. said...

All things considered, Fritz was a good man. He went from segregationist to endorsing Jesse Jackson for president.

Bill said...

re: Scott Brown

Well I certainly didn't vote for him. Unfortunately Martha Coakley wasn't a terribly thrilling choice either and she ran a HORRIBLE campaign based on a sense of entitlement to the late Senator Kennedy's seat.

I'll be pulling for my former representative Mike Capuano come 2012, he'll put up a great fight and will be a true liberal voice for Massachusetts.

Unfortunately for Brown the Herald (surprisingly) turned on him rather quickly.

K. said...

Scott's in over his head. Mitch McConnell must love the guy: A little house training, and he'll vote how he's told to vote and stay on the back bench. Scott's vote for the jobs bill was just a little accident that all puppies have when they're new. But he'll be a good dog.

Darlene said...

I have seen your comments on other blogs (sometimes even mine
)and I decided it was past time to check yours out. I am so glad I did.

Scott Brown made an idiot of himself on Face The Nation when he cited the number of jobs that would be lost if the financial reform was passed. It was so far out in left field that Bob Schieffer was bemused.

Great post and I am off to add your name to my blog roll.

K. said...

Thanks, Darlene! Great piece on the Second Amendment; I'll link to it.

RealityZone said...

Excellent post !