Deficit Peacocks

Posted on February 1st, 2010 by ecthompson

Okay, it’s one of those days when I’m trying to figure out what it is that I want to post. Taylor Swift and Beyoncé took home a bunch of Grammys but I really don’t feel like talking about that. I did not have an opportunity to see the Pro Bowl. I went to the usual blogs to find inspiration — the Daily Kos, Think Progress, Buzzflash, the Huffington Post. Nothing. I did find a funny article on dreams but I surely don’t want to talk about that. I clicked on the link that led me to a New York Times article on the deficit.

I like the topic of the deficits since everybody seems to be in agreement but nothing seems to get done. Okay that statement was sort of right. Both Democrats and Republicans have stated over the years that we need to bring down the deficit. Democrats did what they said they were going to do. Republicans, not so much. Yet, when George Bush was in the White House and the Republicans controlled both houses of Congress, there was no attempt to control the exploding deficit. As a matter fact, to justify tax cuts for the wealthy that were never going to pay for themselves, Bush told us that there was more than enough money for his tax cuts. Neither the war in Iraq nor the war in Afghanistan were paid for. The Bush administration borrowed money for both wars through the supplemental process instead of through the budgetary process in order to avoid more attention.

Now the deficit guys (cleverly described as “deficit peacocks,” since they’re really not hawks) are out in force. They have America worried about how to pay for all of this red ink. Remember when President Clinton handed over the keys to the White House to President Bush? He handed Bush a budget surplus that was projected to be approximately $800 billion per year from 2009 to 2012. Instead, it looks as if we’re spending $1.2 trillion more than we’re taking in during this same time frame. What happened? About 33% of this $2 trillion deficit (the difference between $800 billion in the black and $1.2 trillion in the red) comes from George Bush’s tax cuts and his Medicare prescription benefit. About 20% of the deficit comes from Obama’s extension of Bush policies like the war in Iraq and tax cuts for households making less than $250,000. Only 7% comes from the stimulus bill passed in February 2009. The downturn in the business cycle accounts for approximately 37%.

So the next time a deficit peacock begins to tell you that Obama is ruining the country by driving up higher and higher deficits, you should remind him how we got these deficits. While you’re browbeating this deficit peacock with knowledge, remind him that it appears that Democrats figured out a way to balance the budget while Republicans (Reagan, Bush, Bush) figured out a way to increase the deficit. Republicans do not equal fiscal responsibility.

Tags: Economy // View Comments

  • Anonymous
    Prior to Republicans assuming control of Congress in 1995, President Clinton refused to embrace the idea of a balanced budget. Clinton's first budget called for an astronomical tax hike of $220 billion that Democrats in Congress increased to $240 billion. Clinton's first three budgets -- released in 1993, 1994, and 1995 (for FYs 1994, 1995, and 1996 respectively), left deficits of $241.4 billion, $201.2 billion, and $194 billion by his own estimation (which CBO scored at $228.5 billion, $206.2 billion, and $276 billion respectively). In the meantime he vetoed the Republicans' budget in 1995 -- a budget that would have cut taxes and been the first to have balanced since 1969. Not until election year 1996 did he even aspire to balance, producing a budget that left an $81 billion deficit in its final year

    A little closer to today, we have:
    Progressives Call for 10-Year Wait To Balance Budget

    http://www.usnews.com/blogs/washington-whispers/2009/12/14/progressives-call-for-10-year-wait-to-balance-budget.html
  • Carie
    As recession begun we had been hearing so many budget deficit, it is because we most sectors of the economy had been paralyzed  definitely the government revenue will be affected. The deficit cannot be compensated by the present revenue that is the reason why we can't  escape from budget woes. Employment statistics are so much more important now, as that's the key to signs of recovery.  Analysts are eagerly awaiting Department of Labor reports, but other sources, such as the Institute of Supply Management, have been confirming that slow signs of recovery are happening.  For instance, the service sector, 80% of non agriculture jobs, has been showing slight growth and fewer job losses – especially from the holiday season – and the manufacturing sector and financial services sector have also shown slight improvements.  It doesn't mean less people need payday loans or jobs to begin with, but it is a start.
  • Carie
    As recession begun we had been hearing so many budget deficit, it is because we most sectors of the economy had been paralyzed definitely the government revenue will be affected. The deficit cannot be compensated by the present revenue that is the reason why we can't escape from budget woes. Employment statistics are so much more important now, as that's the key to signs of recovery. Analysts are eagerly awaiting Department of Labor reports, but other sources, such as the Institute of Supply Management, have been confirming that slow signs of recovery are happening. For instance, the service sector, 80% of non agriculture jobs, has been showing slight growth and fewer job losses ndash especially from the holiday season ndash and the manufacturing sector and financial services sector have also shown slight improvements. It doesn't mean less people need payday loans or jobs to begin with, but it is a start.
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  • Everyman
    Bullshit
  • Everyman
    Bullshit
  • ecthompson
    I will address this tomorrow. It will focus on how to fix a recession. 

    Finally, what facts did I leave out. I explained where 100% of the "new" debt came from. 

    Although you are pissed about Healthcare that didn't/hasn't passed so why did you bring it up? This post was about how we turned a surplus into a deficit. Healthcare is your thing. it is like a thorn in your hand that you can't get out. Sorry. I can't help you with that. 

    We need to revisit history. The Republican Congress wasn't where this started at all. Sorry. If you have any evidence that it was the Republican Congress that force Clinton to balance the deficit I'm all ears. 

    Thanks.
  • ecthompson
    I will address this tomorrow. It will focus on how to fix a recession.

    Finally, what facts did I leave out. I explained where 100% of the "new" debt came from.

    Although you are pissed about Healthcare that didn't/hasn't passed so why did you bring it up? This post was about how we turned a surplus into a deficit. Healthcare is your thing. it is like a thorn in your hand that you can't get out. Sorry. I can't help you with that.

    We need to revisit history. The Republican Congress wasn't where this started at all. Sorry. If you have any evidence that it was the Republican Congress that force Clinton to balance the deficit I'm all ears.

    Thanks.
  • Joe White
    As you well know, Clinton and the Democratic congress made no effort to balance the budget.

    In fact, immediately upon taking office Clinton proposed a massively expensive takeover of health care.

    He was stopped cold by a Republican minority in congress.

    It was not until a Republican congress took office in Jan '95 that balanced budgets were taken seriously........and achieved.

    Clinton resisted it, and vetoed it, but was eventually forced to sign on when he was told by his own advisers that it would cost him the next election.

    That, my friend, is where balanced budgets and surpluses of the late '90s came from.

    Now it is true that when Bush took office we were already in the Clinton recession (the NASDAQ lost 50% of its value in Bill's final 12 months while he tried to burnish his image and get people to forget his perjury and impeachment) and tax cuts were needed to stimulate the economy.

    And we were also attacked early in Bush's term on 9/11 and had to put the economy rapidly on a war footing. Clinton had not maintained the military hardware and yes, great amounts of spending to defend the country caused the surpluses to go away at that point.

    But simply chirping 'Bush ran up the deficit' does not adequately describe how we got a surplus in the first place, nor the events that caused it to be lost.

    I do agree that the Medicare prescription program should not have been passed. Bush wanted to be popular and Democrats were chanting 'we need to do something about health care'. It was a mistake.

    So the next time you want to lecture about 'how we got these deficits' you ought to take all the facts into account. But you're just following Obama's example of pointing the finger of blame and ignoring the context of the history surrounding it.
  • Joe White
    As you well know, Clinton and the Democratic congress made no effort to balance the budget.

    In fact, immediately upon taking office Clinton proposed a massively expensive takeover of health care.

    He was stopped cold by a Republican minority in congress.

    It was not until a Republican congress took office in Jan '95 that balanced budgets were taken seriously........and achieved.

    Clinton resisted it, and vetoed it, but was eventually forced to sign on when he was told by his own advisers that it would cost him the next election.

    That, my friend, is where balanced budgets and surpluses of the late '90s came from.

    Now it is true that when Bush took office we were already in the Clinton recession (the NASDAQ lost 50% of its value in Bill's final 12 months while he tried to burnish his image and get people to forget his perjury and impeachment) and tax cuts were needed to stimulate the economy.

    And we were also attacked early in Bush's term on 9/11 and had to put the economy rapidly on a war footing. Clinton had not maintained the military hardware and yes, great amounts of spending to defend the country caused the surpluses to go away at that point.

    But simply chirping 'Bush ran up the deficit' does not adequately describe how we got a surplus in the first place, nor the events that caused it to be lost.

    I do agree that the Medicare prescription program should not have been passed. Bush wanted to be popular and Democrats were chanting 'we need to do something about health care'. It was a mistake.

    So the next time you want to lecture about 'how we got these deficits' you ought to take all the facts into account. But you're just following Obama's example of pointing the finger of blame and ignoring the context of the history surrounding it.
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