The nation’s unnerving descent into debt began a decade ago with a choice, not a crisis.
…The biggest culprit, by far, has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. Together, the economy and the tax bills enacted under former president George W. Bush, and to a lesser extent by President Obama, wiped out $6.3 trillion in anticipated revenue. That’s nearly half of the $12.7 trillion swing from projected surpluses to real debt. Federal tax collections now stand at their lowest level as a percentage of the economy in 60 years.
…All told, Obama-era choices account for about $1.7 trillion in new debt, according to a separate Washington Post analysis of CBO data over the past decade. Bush-era policies, meanwhile, account for more than $7 trillion and are a major contributor to the trillion-dollar annual budget deficits that are dominating the political debate.
…The annual surpluses that set the nation on this course emerged in the final years of the Clinton administration.
…What to do with the surplus became a central issue of the 2000 presidential campaign, with Vice President Al Gore arguing that much of it should be put in a “lockbox” to protect Social Security and Medicare. Bush pushed for a broad tax cut, arguing that taxpayers at all income levels were owed a refund.
…As soon as he took office, Bush pushed Congress to make good on his tax pledge
…Congress approved a $1.35 trillion tax cut in record time. A second package, worth $350 billion, followed in 2003.
…Bush’s first Treasury secretary, Paul O’Neill, resigned after the White House decided to pursue the 2003 measure. “I believed we needed the money to facilitate fundamental tax reform and begin working on unfunded liabilities for Social Security and Medicare,” O’Neill said in an interview.
…“Nobody would have thought that all these things would have happened after you cut taxes,” Domenici said. “That you’d have two wars and not pay for them. That you’d have another recession. A huge extravaganza of expenditures” for the military and homeland security after the Sept. 11, 2001, attacks. “You would pause before you did it, if you knew.”
…In the end, Bush cut taxes and spent more money. Good times masked the impact, as surging tax revenues reduced the size of year-to-year deficits during the first three years of his second term. But after the economy collapsed during Bush’s final year in office, deficits — and therefore the debt — began to explode as Obama sought to revive economic activity with more tax cuts and federal spending.
… Policies and legislation from both parties have contributed to the deficit. It is clear that Bush/republican policies have contributed more. Republicans had no plan and no interest in paying for their massive spending programs. In light of the debate surrounding the deficit now, republican arguments should be considered irrelevant. They very hesitantly own up to their massive spending during the Bush years as they criticize Obama for his relatively lower contributions to the deficit. Much of it being tax cuts that they strongly support. That is the nature of politics. The important thing is to be cautious listening to politicians. It is far better to read up, research and think critically on your own about the issues present in today’s political debate. Educate yourself!
It is important for people and especially young people to read up on the history of the U.S. budget deficit and how things got to the point they are at today.
The Washington Post provides an extensive overview of all things related to the budget and fiscal policy debate. I encourage anyone interested in learning more about the related issues to check out their overview here. Included is a good article describing the policies enacted over the past 11 years that have contributed to the large budget deficit.
A summary of the article is below: