A Brief History of Deficits

The voices on the right constantly complain of the burden on our nation caused by the deficit. They warn of the impact it could have on our future credit rating and our future in general as a nation.

The irony here is while the right spews hours of platitudes on tv and radio about "tax and spend democrats", it is actually the republicans who have trouble controlling their spending. It was Ronald Reagan who entered office with the United States as the world’s greatest creditor, but when he left office we were the world’s greatest debtor. It was Reagan and his administration that tried to convince us that deficits weren’t bad for us as a nation. Apparently the republican party believed Reagan's claim.

Tax and Spend or Who Really Increased the Deficit
Each time you hear them talk about "tax and spend democrats", remember that yet again the facts are contrary to the right wing notion of fiscal conservatism. Here are a few quick examples:

Ronald Reagan increased the deficit from $1.6 Trillion to $3.0 Trillion.

George H. W. Bush increased the deficit from $3.0 Trillion to $4.3 Trillion.

George W. Bush increased the deficit to $10.8 Trillion.

Deficit By Administration

George W. Bush: His Deficit Stands Alone
George W. Bush gets special recognition because not only did he increase the debt, but he actually turned an $850 billion budget surplus into a $1.2 Trillion budget deficit. By the end of his presidency, he had single handedly created 42% of our national debt.

You’ll note of course that the only President to balance the budget, create a surplus and start paying down the debt was the “tax and spend democrat” Bill Clinton. The question naturally arises how did we go from a budget surplus to doubling our national debt?

CBPP Bush Deficit Chart

There are four primary causes of the explosion of our debt. First, George W. Bush looked at the budget surplus, and rather than be fiscally responsible he opted to spend the money. He could have used the surplus to pay down our national debt, to shore up programs like medicare, medicaid and social security. Instead, he gave a massive tax cut to the rich, while simultaneously giving a modest tax cut to the poor and middle class.

Having essentially eliminated our national windfall, George W. Bush then went on to grow spending. His spending was largely in the form of wars. It’s clear that America had to respond to 9/11. It’s clear that we had to fight terrorism. It’s clear that we had to do everything we could to prevent this kind of attack in the future. But George W. Bush chose not to effectively do any of these things and instead spent on the order of $600 Billion to $1 Trillion dollars on the wars. By 2019 Bush’s decision to wage war on a nation that had no involvement whatsoever in 9/11 and his tax cuts will cost us almost $7 Trillion.

The third contributor is Bush's unfunded prescription drug plan, Medicare Part D. Estimates for the cost of this program over 10 years is between $1 Trillion to $2 Trillion. Comparatively, not a large amount of money, but these dollars are unfunded and unlike the Bush tax cuts, the wars and the economic downturn, Medicare Part D is not a temporary problem that will go away, it will continue into the future.

The fourth component that significantly contributes to our debt is the financial crisis. Of course there are many causes but Bush’s policies as well as our nation’s decade long adherence to trickle down economics and deregulation were significant contributing factors.

Someone Should Do Something About The Deficit
We now find ourselves in a very deep hole. The right argues that we need to cut. We must bring down the deficit. We must deny any opinion from the left, we must ignore any argument for any program of any value. We must cut. We must cut now.

This is the classic republican “someone should do something about that (problem we created)”. Over the past four decades, republican economic policies have significantly weakened our nation financially. Republican presidents and right wing policies have exploded our deficit. As soon as a democrat is elected president the republicans turn and point to the democrat and say “the deficit is a real problem, someone should do something about that. The deficit is a real problem, and it’s his fault.”

Of course the solutions from the right ignore the sources of our debt. Rather than eliminate the Bush tax cuts, they fight to make the deficit larger by extending them. Rather than get out of the wars, cut the costs of defense and start a real war on terror, an effective war on terror, the right marks defense budgets as a sacred cow not to be touched.

The right argues that what is needed is to cut services, to cut programs that the poor and middle class rely on. It’s not enough that our wages have been flat since the early 1970s. It’s not enough that we are unemployed. It’s not enough that we have more “99ers” than we have ever had in our history. It’s not enough that we need to invest in infrastructure and education. No, clearly the answer is to take more from the poor and middle class while asking nothing of the wealthiest of our nation.

The fiscally conservative right fights the difficult war of cutting discretionary spending. Their proposal, which admittedly likely won’t pass looks to eliminate $2.7 Trillion over 10 years. These cuts will do very real damage to our nation, but very little to help cut the deficit. Meanwhile the tax cuts they extended and the wars they so vigorously support will cost us almost $7 Trillion.

So the right’s answer to the problem which is largely of their creation, is to give a significant portion of $7 Trillion to the wealthy while trying to cut $2.7 Trillion from the poor and middle class. It would appear that the only thing worse than “tax and spend” is “tax cut and spend”.

When looking at entitlements, the largest portions of our budget are medicare, medicaid and social security. We all remember how vigorously the right opposed healthcare reform and any attempt to reduce medical costs. Again, the right’s answer is to cut benefits, cut these programs by extending the retirement age, not cut the rising rate of medical costs.

Our Opinion Matters
A recent NBC / Wall Street Journal poll noted the following American opinions:

81% think we should tax millionaires

68% think we should eliminate the Bush tax cuts

74% think we should cut oil and gas company tax breaks and subsidies

77% think that public unions and collective bargaining should be protected

In the face of the reality of our deficit, and contrary to the views of the people, the right fights for tax cuts for the rich. They fight to preserve the Bush tax cuts. They voted unanimously to continue to subsidize oil companies with $40 billion in subsidies.

Will The True Conservatism Please Stand Up?
Fiscal conservatism? Tax and spend? The words of the right are consistently 180 degrees from the truth of the reality we are facing. Talks of cuts are premature. We can not discuss cuts until we as a nation understand and the republicans as a party acknowledge the causes of our deficit. Once we are discussing the facts, then we can begin to negotiate responsibly over fair and reasonable cuts.

Spending more than you have is not a conservative value, yet we see those who speak for conservatives enacting this very practice for decades. The left has played it’s role by enabling and in many cases voting for policies we know not to work. We must demand a discussion based in fact. A discussion of reality. We must turn back the idea that it is the size of government, entitlement programs for the poor, and spending by democrats that are the source of our problem.

True conservatives truly want to be fiscally responsible. If we fight to restore truth in this debate, true conservatives may just be able to have their voices heard.