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.