It's Bush's Deficit

So says The New York Times' David Leonhardt:

You can think of that roughly $2 trillion swing [from the $800 billion surplus for 2009 through 2012 projected back at the end of the Clinton administration to the $1.2 trillion deficit now projected for the period] as coming from four broad categories: the business cycle, President George W. Bush's policies, policies from the Bush years that are scheduled to expire but that Mr. Obama has chosen to extend, and new policies proposed by Mr. Obama.

The first category -- the business cycle -- accounts for 37 percent of the $2 trillion swing. It's a reflection of the fact that both the 2001 recession and the current one reduced tax revenue, required more spending on safety-net programs and changed economists' assumptions about how much in taxes the government would collect in future years.

About 33 percent of the swing stems from new legislation signed by Mr. Bush. That legislation, like his tax cuts and the Medicare prescription drug benefit, not only continue to cost the government but have also increased interest payments on the national debt.

Mr. Obama's main contribution to the deficit is his extension of several Bush policies, like the Iraq war and tax cuts for households making less than $250,000. Such policies -- together with the Wall Street bailout, which was signed by Mr. Bush and supported by Mr. Obama -- account for 20 percent of the swing.

About 7 percent comes from the stimulus bill that Mr. Obama signed in February. And only 3 percent comes from Mr. Obama's agenda on health care, education, energy and other areas. [emphasis added]

That's right, folks. While the "deficit hawks" within the Republican Party are all up in arms(!) about proposed spending on healthcare, education, energy, etc. -- that is to say the agenda Barack Obama ran and won on in 2008 -- this platform makes up about 3 cents out of every dollar in deficit spending.

But where did all that other deficit come from, the other 97 cents? Much of it came from none other than George W. Bush, supported by those very same Republicans who now purport to dislike the deficit. Yes, a big part of today's deficit stems from the economic downturn, but at least part of that stems from the policies of the past eight years. Another 7 cents out of that dollar comes from the stimulus package proposed, then signed into law by Barack Obama -- but, again, that figure proximally results from the economic downturn, so all on the onus for this deficit spending can't be laid at the current President's feet.

Yet without getting into proximate causes and the like, we can say that a majority of the swing in the deficit -- 53 percent, to be exact -- comes from the policies of George W. Bush and the Republican Party. Per Leonhardt, this percentage stems from both Bush initiatives (33 percent) and from policies enacted under President Bush that are being continued under President Obama (20 percent).

I don't foresee this changing the tenor of the coverage of politics by the establishment media. Republicans will still be allowed to call themselves "fiscally conservative," even though their record clearly proves the opposite (see above). Nevertheless, it is apparent that while this deficit now belongs to Barack Obama, it was handed to him by George W. Bush and the Republican Party -- and was not a result of the stimulus or even attempts to reform healthcare or to achieve energy independence.

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Good Cop, Bad Cop

In a rational world, today's Republican Party would be little more than a kooky fringe group, like the Larouchites. Unfortunately, we live here. And in America 2009, on the nation's premier business channel, the utterly discredited economic theories promulgated by George W. Bush and Company are still considered sacrosanct. I guess it's comfort food for CNBC's shell-shocked viewers, who cling to the fantasy of becoming swashbuckling Wall Street Jedi.

Last evening on the network, Arthur Laffer, legendary father of a ridiculous economic curve, teamed up with Larry Kudlow to denounce the administration's plan for saving the nation's banking system. Hallelujah! This was the first unadulterated piece of good economic news I've heard in weeks. If Kudlow and Laffer think the Geithner plan is a train wreck, then I'm getting bullish on America again. Those guys are always wrong.

Then, this morning, Kay Bailey Hutchison and Judd "We Hardly Knew Ye" Gregg went on Squawk Box to complain about the deficit. No--really--they did. These "Republican moderates"--who never met a two trillion dollar war they wouldn't put off-budget--had the audacity to pose as penny-pinching guardians of the public till. Forget the fact that their supply-side snake oil has turned fatally rancid. Hutchison and Gregg deserve to be tarred and feathered around the clock solely on the grounds of criminal hypocrisy.

I'm no big fan of President Obama's rhetorical choices, but on substance, his speech the other night was excellent. His obsession with bipartisanship drives me up a wall, but it appears to be part of a long-term strategy. I'll just have to get used to it. But what about the rest of the Democrats? You know, the ones who aren't President? Well, when they're not actually legislating, they need to be out there trying to terminate--with extreme prejudice--the Republican Party's current raison d'etre. Condescension and ridicule--as well as the truth--should be their weapons of choice. Let Obama take the high road.

The stakes are too great, and there's too much to do, to risk letting the GOP get their hands on the government again. The proponents of such a dangerous and bankrupt philosophy need to be exposed ASAP.

Cross posted on http://www.sternlywordedletters.blogspot .com/

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Get Obama's Back: WE DO HAVE THE MONEY

As I said yesterday, this election was not the end of a fight, but merely the beginning.  Many struggles still remain--including the one for marriage equality (see Paul Hogarth's excellent piece for why we failed in CA, and what we can do better in the future)--but by far the biggest challenge facing us now is the argument about money.

As soon as Obama takes the oath of office, Republicans will become sudden deficit-hawks.  Their allies in the conservative media (like the AP) will begin saying that there is no money for any of Obama's programs like national healthcare, national service, alternative energy and so many others.

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Bush's Program To Redistribute Wealth In a Nutshell

The New York Times has an article today that explains what the real cost of the September 19th bank bailout will be in real terms - $2000 for each man, woman and child in America, whether they have investments or not. (Is it at all clear that this will be the last or even the only bailout we are asked to fund this year? Something doesn't pass the smell test.)
 the quote goes "A billion here, a billion there, and pretty soon you're talking about real money."

"But even allowing for inflation and in the context of federal spending standards, $700 billion is an enormous sum.  It represents more than $2,000 for every man, woman and child in the United States."

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Borrow-and-Spend Towards Oblivion

Associated Press is reporting today that the budget deficit for FY2009 is projected to reach $490 billion--marking an impressive third time in President Bush's eight-year watch that he has broken this record (the first was the $374 billion 2003 deficit, immediately bested by the $413 billion 2004 deficit).

A Bush administration official said Monday the next administration will inherit a record federal budget deficit for next year that approaches $490 billion.

The official said the deficit was being driven to record levels by the sagging economy and the stimulus payments being made to 130 million households in an effort to keep the country from falling into a deep recession. A deficit approaching $490 billion would easily surpass the record deficit of $413 billion set in 2004.

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