The Truth About the Deficit - a work of fiction from the NYT

When the White House released its new budget last week, including more spending to create desperately needed jobs, Republican leaders in Congress denounced President Obama for driving up the deficit and demanded that the Democrats halt their “reckless” ways. Skip to next paragraph Related Select Editorials on Financial Regulation

The deficit numbers — a projected $1.3 trillion in fiscal 2011 alone — are breathtaking. What is even more breathtaking is the Republicans’ cynical refusal to acknowledge that the country would never have gotten into so deep a hole if President George W. Bush and the Republican-led Congress had not spent years slashing taxes — mainly on the wealthy — and spending with far too little restraint. Unfortunately, the problem does not stop there.

The Republican amnesia and posturing are playing well on the hustings, where Americans are deeply anxious about the economy and fearful of losing their jobs and homes. Far too many Democratic lawmakers are losing their nerve.

"But the cold economic truth is this: At a time of high unemployment and fragile growth, the last thing the government should do is to slash spending."

Didn't work for FDR, and ain't gonna work now.

"About half of today’s huge deficits can be chalked up to Bush-era profligacy: mainly cutting taxes deeply while borrowing to wage two wars and to enact the Medicare prescription drug benefit — all of which Republicans supported, virtually in lockstep."

And in 4 years the Obama fraction of the deficit will be 80%. Blame Bush isn't a policy, and I for one, wish we ONLY had the Bush era deficits.

"As for why the financial system and the economy imploded, President Bush and Congress deserve much of the blame for their devotion to debt-driven growth and blind deregulatory zeal"

Deregulation my RIA! What we got is corruption, where the regulated payoff the politicians. Moral hazard, in two words.

"In fact, a clear lesson from the Depression of the 1930s is that reducing deficits at a time of economic fragility undercuts recovery."

Ain't working for JAPAN now is it? And they've been trying for 10 years to deficit spend their way to prosperity.

"To truly tame deficits will require serious health care reform, the sooner the better."

NONSENSE healthcare is 17% of our economy, government is 22% and headed higher.

"On the need for more taxes, Mr. Obama has been less than candid, pledging never to raise taxes on anyone making less than $250,000."

AT LAST a true statement, and Obama DOES want you to pay more taxes so he can buy other people's votes with your money.

"And then there is Social Security. What is needed is a combination of benefit cuts and tax increases that preserve the program’s essential nature — a contract under which the young support the old via taxes and the rich help the poor via a benefits formula that favors low- income beneficiaries."

THAT WAS NOT THE DEAL when social security was passed, and the only means testing that has happened so far is that I paid more when I made more. THIEVES!

"There is no way to get deficits under control until our political leaders are willing to acknowledge difficult truths and make even more difficult political choices. We have heard and seen too little of that from the Democrats lately, and none at all from the Republicans."

NON SEQUITUR. Hopefully the TEA Party will help find politicians who are up to the task.

Received this email today. Author unknown.

********I’m Sick of “Inherited” *************

The Washington Post babbled again today about Obama inheriting a huge deficit from Bush, blah blah blah. Amazingly enough, a lot of people swallow this nonsense.

So once more, I’ll try a short civics lesson.

Budgets do not come from the White House. They come from Congress, and the party that controlled Congress since January 2007 is the Democratic Party. They controlled the budget process for FY 2008 and FY 2009, as well as FY 2010 and FY 2011. In that first year, they had to contend with George Bush, which caused them to compromise on spending, when Bush somewhat belatedly got tough on spending increases. For FY 2009, though, Nancy Pelosi and Harry Reid bypassed George Bush entirely, passing continuing resolutions to keep government running until Barack Obama could take office. At that time, they passed a massive omnibus spending bill to complete the FY 2009 budgets.

And where was Barack Obama during this time? He was a member of that very Congress that passed all of these massive spending bills, and he signed the omnibus bill as President to complete FY 2009.

Let’s remember what the deficits looked like during that period: (CHART DID NOT EXPORT)

If the Democrats inherited any deficit, it was the FY 2007 deficit, the last of the Republican budgets. That deficit was the lowest in five years, and the fourth straight decline in deficit spending. After that, Democrats in Congress took control of spending, and that includes Barack Obama, who voted for the budgets. If Obama inherited anything, he inherited it from himself.

In a nutshell, what Obama is saying is I inherited a deficit that I voted for and then I voted to expand that deficit four-fold since January 20th.

WAKE UP, AMERICA , BEFORE IT’S TO LATE

Has everyone forgotten about 4 HUGE events?

1. 9/11

2. Afghanistan

3. Iraq

4. Katrina (and the other Hurricanes of the mid-2000s)

Bush spent WAAAAY to much, but, those 4 events were not planned at all. You can argue that Afghanistan and Iraq were planned, but had 9/11 not occured, we wouldn’t have gone.

er, uh, actually budgets DO come from the whitehouse.

The Congressional Budget Act of 1974 requires that the President of the United States submit to Congress, on or before the first Monday in February of each year, a detailed budget request for the coming federal fiscal year, which begins on October 1. Prepared by the president and the president’s Office of Management and Budget (OMB), the president’s annual budget request performs three key functions in the annual federal budget . . .

They are however approved by Congress

“Has everyone forgotten about 4 HUGE events?”

Convenient memory loss occurs if it interferes with their “Bush's Fault” mantra.

Thank you for pointing out these 4 HUGE events. Many like to complain about them, or rather the handling of them, but few will add them into the equation.

Table 1:
Domestic Discretionary Funding Is a Shrinking Share of Total Program Costs
Share of Total ................. 2001 ...... 2008 ..... Change
Defense & security ............ 21.7% ..... 29.2% .... +7.5%
Soc Sec, Medicare/caid ...... 45.9% ..... 43.5% .... -2.4%
Other mandatory programs .. 14.0% ..... 12.5% .... -1.4%
Domestic discretionary ........ 18.4% ..... 14.7% .... -3.7%

...Republicans' cynical refusal to acknowledge that the counrty would not have gotten in so deep a hole had President George W. Bush and the Congress not spent so many years slashing taxes...Bush tax cuts, Bush tax cuts - they're like parrots repeating the only phrase they know over and over again - a quick visit to the Congressional Budget Office's own web page puts the lie to the canard that Bush tax cuts ran the country into debt (Link) . The chart of revenues and outlays shows a dramatic slide in revenues right after 2000, at the end of the Clinton recession, the bursting of the dotcom bubble, and the downturn in the economy after 911 - but starting at about 2003 - just when the Bush tax cuts were kicking in- and for the next 3 or 4 years. revenues increase dramatically. Indeed they would have caught up with expenditures in one more year had 'rats not taking over Congress in 2007 - it's after that when expenditures skyrocket - a little research would do the NYT a lot of good.......

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