The US continues to rack up more and more debt, with a deficit in the trillions. But how did we get here? Teresa Tritch for The New York Times examines:
In 2001, President George W. Bush inherited a surplus, with projections by the Congressional Budget Office for ever-increasing surpluses, assuming continuation of the good economy and President Bill Clinton’s policies. But every year starting in 2002, the budget fell into deficit. In January 2009, just before President Obama took office, the budget office projected a $1.2 trillion deficit for 2009 and deficits in subsequent years, based on continuing Mr. Bush’s policies and the effects of recession. Mr. Obama’s policies in 2009 and 2010, including the stimulus package, added to the deficits in those years but are largely temporary.
Predicting the future is a tricky game. Even if you do have Grays Sports Almanac.
[New York Times via Waxy]
I thought the other graphic in the NYT article was more telling.
More telling? I think you meant vastly more distorted, inaccurate, and highly misleading?
Distorted . . . How? The Bush-initiated tax cuts and the Bush-initiated wars changed Clinton-era surpluses into Bush-era deficits. There is really no arguing that.
And the persistence of those Bush-initiated cuts, in contrast to the transience of Obama-initiated spending, ensures that Bush, rather than Obama, will remain responsible for the explosion of debt in the 2000s.
Not that anyone should expect his defenders to admit that. They never admitted Reagan was responsible for the expansion of debt under his watch, either.
Policy impacts are often not felt immediately (this is a good way to “buy now, pay later” so to speak) – the “temporary” tax cuts impact over time escalate (as one example).
Joel…so policy impacts are not felt immediately, but they are for Bush? Couldnt the same be said of Clinton then..his policies took effect well into Bush’s terms??
Stop the hypocrisy.
Wouldn’t it be nice to see a graph that now shows EXISTING spending that the president at the time had promised to terminate… and didn’t?
Both charts are ridiculously misleading. For starters, the majority of the spending on Bush’s column occurred under Obama’s term!
Was president Obama’s mandate to cut spending when he was elected during a horrible financial crisis? Of course not, because this contractionary fiscal policy would have been, well, contractionary… The debt accumulated over the past 10 years is mainly due to Republicans (many of which are still in congress – Ryan, McConnel, Boehner all voted for the tax cuts, increased entitlement spending and unfunded wars) who have suddenly found debt religion. The 2009 deficit was projected to be at 1.2 trillion before Obama signed his first law… He signed the stimulus package and the deficit ends up being 1.4 trillion, yet somehow the entire deficit for the year is his fault? It’s pure hypocrisy and now we might default on our debt because they are all acting like children.
Why do modern conservatives have such a hard time admitting that Bush’s policies are a significant driver of our deficits? Especially people on this website who are *supposed* to know a little something about numbers and math.
Tax cuts dont add to the deficit. Typical Liberal inventing stats and numbers to try and prove their argumen.
The government doesnt PAY for tax cuts…its the citizen’s money. “Allowing” us to keep more of it is not an expenditure. Educate yourself.
Nick, you are a typical neo-conservative ignoring stats. and numbers because they aren’t convenient for you. People like you have completely ruined the valuable lessons that conservatism teaches us.
A statement like “tax cuts don’t add to the deficit” is absolute nonsense that real conservatives like Reagan, Milton Freidman, Eisenhower, George H. W. Bush (not his irresponsible son) and others would completely disagree with. You are completely, 100% wrong.
Let me simplify it for you. There are two variables in the deficit equation, taxes and spending: deficit = revenue minus spending. If you do nothing to change your obligations, i.e, the spending already required by law (think Medicare, Medicaid, Social Security, veterans benefits etc..) and you reduce your revenue (cut taxes), then you are adding to the deficit. To make things even worse, you can simultaneously cut taxes and increase spending, which is exactly what Republicans did throughout the early 2000’s. It’s not a liberal lie, you are just too stubborn and willfully ignorant to get that.
Don’t even try to pawn the reality of this situation as a liberal invention. You have no idea what you’re talking about.
Did you not read the title of the graphic? Here it is again, “Policy *Changes* Under Two Presidents”.
I’ve collected several visualizations (including the NYT’s) of the US government debt situation. A few focus on who’s to blame and depending on how you process the numbers you can blame either side of politics http://bit.ly/ptb192
Actually, I remember after George Bush got elected and before he took office, reporters were asking the then President Clinton about the economy slowing down. Clinton said x out of x economists say it’s nothing to worry about, which certainly turned out not to be true. So George Bush inherited the bad economy from President Clinton!
It accomplishes so much more when we figure out who is to blame for a crisis rather than how the hell we’re going to fix it.
To be fair….you have to know what caused a problem to be able to fix it…in this case, its a legit debate….were tax cuts or tax increases responsible for less government revenue, for example…were the Wars or entitlement spending responsible for the debt?
Obama’s deficit spending is triple Bush’s.
Under Bush, our debt increased $4.8 trillion in 8 years..most of it the last 2 years with Dems in Congress….under Obama, $4.4 trillion…in 2.5 years….again, most of it with Dems in control of Congress.
And where was your outrage during those 8 years, Nick? I’m guessing you were you were on the “Reagan proved deficits don’t matter” train at that time (Dick Cheney said that).
It is far more irresponsible to run up debt while the economy is more or less at full employment and growing (2003 – 2006). The only time that we should be running large deficits is when the economy is severely depressed.
Furthermore, most of the current deficit is mainly due to low employment (less tax revenue combined with higher mandatory spending in the form of unemployment benefits), irresponsibly low taxes rates and military spending. The stimulus spending is over; you can’t blame $4.4 trillion in debt on an $800 billion stimulus. I suppose it takes some knowledge of basic algebra to understand that though.
I’d +1 for the Gray’s Sports Almanac comment.
The charts are interesting, but as usual they are poorly explained and sourced. With something as complex as the federal budget, it’s important to be precise about how we account for multi-year obligations like the tax cuts or health care vs. one-time events like the 2008 stimulus. The 2008 stimulus doesn’t impact today’s deficit any more than the construction costs of the Hoover Dam.
Perfect example of how liberals use statistics in a highly misleading fashion.
1) The economy was slowing down as Clinton handed it off to Bush.
2) A Republican Congress was responsible for the budget which Clinton signed .Therefore, credit belongs to the Republicans for a budget surplus.
3) Revenue went up after the Bush’s 2003 across-the-board tax cuts. Revenue increased after a decrease in tax rates.
1). What’s your point? It was the end of the tech bubble that caused the recession. The 90’s growth levels weren’t possible forever. Is a slowing economy reason to cut taxes by trillions over the next decade with no corresponding spending cuts?
2). Partially correct, however a big reason was the cuts and tax increases signed by George H. W. Bush in his short and underrated presidency. Furthermore, Clinton didn’t give in to Republican demands to cut Medicare and instead raised taxes on the wealthiest (just like Bush senior and Reagan did). Republicans said that higher tax rates for the wealthy would destroy the economy but they were proven wrong. The late 90’s balanced budget was a bipartisan triumph for moderate, centrists and Bush threw it away.
3). This is simply not true. When asked if tax cuts increase revenue, Alan Greenspan replied “they do not”. There is no empirical evidence for this claim. If you simply look at revenue in terms of total dollars, then yes, revenue was higher several years after the tax cuts, but this is not honest analysis. If you adjust revenue for changes in population and inflation, then you will see that revenue is much lower.
Conservative economist Bruce Bartlett discusses this right-wing fallacy constantly:
All this sniping doesn’t get at how to fix the problem of balancing out spending obligations versus revenue collection. IMHO there are two actions we can demand of our government make this happen;
1) term limits – Public service is meant to be a sacrifice not a special revolving door that makes you a millionaire. Lets make sure public servants are true servants for the nation, and
2) a balance budget amendment to the US constitution.
Over time both these actions set the country back on a sustainable path.
You are right about the sniping, but it’s difficult to have a real conversation about the topic when there are people who actually believe that tax cuts increase revenue.
1). I agree with term limits. Republicans have proposed term limit amendments to the constitution several times usually to be ignore.
2). I disagree with a strict balance budget amendment. Here is why: imagine for a second that there was a balanced budget amendment to the constitution in 2008 and 2009. The economy shrank by 7% the last quarter in 2008. Simultaneously you have a huge decrease in revenue from lost jobs and, under current law, an increase in spending from unemployment insurance, medicaid, food stamps etc…(all of this existed before Obama was in the picture so don’t get upset at him about it). However now, with a BBA, the government is required by law to balance the budget. In 2008 the deficit was $1trillion. So where do you start cutting? Do you eliminate discretionary spending (EPA, Dept. of Energy, Dept. of Transportation, Veterans Affairs etc…)? Too bad that only gives you about $700 billion in savings. Do you start cutting Medicare and Medicade? That’s about $800 billion. Of course, all of these cuts will result in further job losses in an already terrible economy, just making tax revenues fall lower exacerbating the problem… While I understand that a BBA sounds good, it is simply doesn’t seem like it can work in the real world.
You know the main way that this all gets fixed? Politicians stopping corruption by not giving in to the bribes of major corporations, who get their way just by paying a few shavings of their massive wealth. And usually only so that they can protect more of their massive wealth. Massive wealth that ends up evading most taxes and getting spent overseas where the only returns are goods with inflating prices that continue to add to said wealth.