There is a right way and a wrong way to blame George Bush for future budget deficits. The wrong way is to get mad about his tax cuts and the Iraq war. By 2019--the end of the budget window, and the period with which us structural deficit hawks are concerned--the Bush tax cuts will have long since expired. We are also scheduled to have withdrawn from Iraq. You cannot explain any portion of the 2019 budget deficit with these two factors.
Better is to point to the increase in net interest on the debt under Bush, which is, indisputably his fault. (Well--him and the Republican Congress.) That's about $100 billion a year, although since Bush shrank the average maturity of US debt from 60-70 months down to 48, if our unusually low interest-rate environment persists much longer, we'll have refinanced most of that debt at very attractive rates. Call it $75-90 billion, anyway.
The other major contribution that Bush made was the atrocious Medicare Part D, which sucks about 75% of its revenue from the general fund. This is a hard criticism for Democrats to mount, since they wanted the damn thing to be even bigger, but luckily I hated it from the beginning, and am thus bound by no such qualms. By 2018, Medicare Part D will, barring legislative change, rake $100 billion off the annual budget.
Other than that, Bush left no significant structural budget deficit--by the end of his term (before the financial crisis), the deficit was down to 1% of GDP. Of course, spending spiked at the end, but if I'm willing to give Obama a pass on financial crisis spending--and I am--I have to extend the same courtesy to Bush.
But roughly $200 billion is not small change. It is a very large sum, and the Bush administration was behind every extra dollar we'll be spending. That's making Obama's job harder, and Democrats have every right to be mad about it. Indeed, the rest of us should enthusiastically join them.
Copyright © 2010 by The Atlantic Monthly Group. All rights reserved.
With respects to your qualms... George Bush appears to be very much like Obama in one horrible respect: he always felt deeply compelled to appease congressional democrats in much the same way that Obama seems compelled to bow to foreign leaders and apologize for the Monroe Doctrine.
I don't understand why either of these men felt this need to "all get along" in their particular vein, but the results are unmistakable: Bush gave us a hideous string of fiscally irresponsible social programs, while Obama gives us a hideous string of foreign policy ineptitude. Plus, Obama gives us even MORE fiscal insanity, both in terms of quantity and quality.
George Bush was a terrible president, fiscally, but he really isn't even a waterboy compared to the current office holder. Barack Obama is the Tiger Woods of deficit spending. Nobody else even comes close.
Its not at all hypocritical to argue that things like the Bush tax cuts and the Iraq war will be eliminated on schedule while things like health care are held to the standard of congressional Real Politik....no siree.
I'm sure you have a great explanation for your double standard. I'm all ears.
Is health care to be eliminated on schedule?
Normative =! positive. I don't know how many times I have to say this before you stop confusing the two in ham-fisted tu quoques.
The Bush tax cuts may be extended--indeed, I expect large portions of them to be. But if that happens, that's the fault of the Democrats who do the extension, not George W. Bush. Likewise, if Republicans in 2023 undo provider cuts, that's their bad. My concern with the bill is that it makes it likely we'll end up doing spending we can't pay for, not that it proves that Obama is a terrible fellow.
For someone who complains about ad hominems, you certainly use them a lot. But I suppose it is consistent that you apply double standards on your meta-analysis too.
This normative/positive distinction is an excellent example of a standard McArdle rhetorical dodge.
The fact of the matter is that policies have institutional inertia. If the Congress in 2019 can't manage to end the wars that Bush started, the blame still rests primarily with Bush. The same logic applies to the Tax cuts. The Bush administration cleverly put an expiration date on their taxes knowing full well that people would see the expiration as a tax raise and blame the current congress. But the fact that it was clever and dodges responsibility in the mind of the public doesn't mean that Bush isn't responsible.
The hypocrisy comes in because this awareness of the short-comings of political institutions and unintended consequences is the basis of the majority of your criticisms of others, but when the same criticism is applied to you, suddenly you are just stating facts and can't be bothered to scrutinize implications of your statements in detail.
Also I said this before, but making tons of "factual" statements in a policy context, especially when you stretch interpretation so liberally, then claiming that there is no implied advocacy is a prima facie violation of Gricean Maxims.
So Obama and the Democratic congress have virtually no responsibility for doing anything about the Bush tax cuts? This is what you think an unbiased estimate would look like?
Democrats only have so much political capital, but I'll admit there are opportunity costs to political capital. If there were no more important issues to deal with and they rested upon their laurels, I'd blame them. At this point, however, there are much more important issues; things like the long-term costs of health care, the unemployment rate, financial regulation and the wars we're fighting. I'm not going to blame Obama for focusing the finite resources he has on the most important problems.
It seems to me like your standard debits the current administration for all the problems in the status quo, then credits them for any improvements they make. Since it is inevitable that they can't fix everything, your standard is predisposed to give a negative estimation of performance.
My standard would start an administration at 0 and debit or credit them with changes they make to the de facto status quo.
The fact of the matter is that policies have institutional inertia.
The damn Bushies put the tax cuts in for political reasons, putting the politics before the national fiscal welfare -- veritiable traitors to America, that makes them.
But when the Obama-ites renew those same tax cuts it will be because they are forced to do so against their will, for political reasons!
What choice do they have? With a 60% majority in both House and Senate, and a President who could veto any renewal by himself, they are helpless! Institutional inertia leaves them victims!
Thus, the damage to the national fiscal welfare that will result when the helpless Democrats are forced to all vote together to renew those expired ex-tax cuts will be just more proof of what veritable traitors the Bushies were.
What zosima said. Tax cuts expire like spending cuts appear: rarely. Bush deserves as much blame for tax cuts that last past the expiration date that you're heaping on Democrats for relying on healthcare savings and cuts now.
This is the kind of blame and excuses game that institutionalizes and rationalizes not fixing the problems created by previous politicians.
Look, Megan, you have to concede this "political inertia" point about the Bush tax cuts. What you don't have to concede is that it lets Obama and the Democratic Congress off the hook. Like you, I've got a lot of blame in me when it comes to our structural deficits. I'm entirely capable of fully blaming both George Bush and the Republican Congress for squandering the budget surplus they inherited AND blaming Obama and his Democratic Congress for widening it.
Normative =! positive
Your friendly C compiler complains. It's "!=", not "=!".
But I'm ready to make wholesale discounts to Apple users.
Max,
Megan was assigning the logical negation of "positive" to the variable named "Normative".
--Colin
I think history demonstrates that all tax cuts -- even ones not explicitly designed as such -- are temporary, and that all entitlement expansions are permanent. That's why Ronald Reagan, the most popular President of the last 40 years, arguably had so little lasting impact on domestic policy (compare him to LBJ, for example).
What history are you talking about? Top rate taxation was 70% immediately before Reagan, cut to 38.5% by the end of his term, and now sits at 35%, with a significant chance to go back to around 39%. As long as we're throwing around unsupported maxims, I'd say domestic policy still lives in the house that Reagan built, and he still has a huge lasting impact.
Apparently no one noticed that we cut taxes and revenues went up. The Obama years are certainly going to be interesting as taxes are raised and revenues continue to decline. It the revenues that matter not tax rates.
Apparently no one noticed that we cut taxes and revenues went up
Is that a joke or do we really live in different universes? The Laffer curve and theoretically increased revenues are always part of the conversation when discussing tax policy. In fact, the Laffer curve is seldom, if ever, used to justify increased taxation because of falling revenues. To my knowledge, almost everyone agrees that the Bush Tax Cuts didn't pay for themselves.
DaeinHackensack said that history demonstrates that all tax cuts are temporary and Reagan had little lasting impact on domestic policy, so I countered that his tax cuts are largely still in place without commenting at all on revenues or whether it was a good or bad policy.
And to follow up on that, absolute revenues went up, revenues relative to gdp went down. Since 1981, the highest revenue to gdp ratio was the year 2000, the lowest was 2004.
http://en.wikipedia.org/wiki/File:Revenue_and_Expense_to_GDP_Chart_1993_-_2008.png
(Wikipedia hosting of CBO data from http://www.cbo.gov/budget/data/historical.pdf )
Has anyone considered that revenus are a lagging indicator?
It takes time for the cut taxes to travel through the economic system, gaining the velocity for small businesses to hire new workers which increases the number of people being taxes which increases revenue despite a lower tax.
It's simple, obvious, and correct.
The tax cuts were why we recovered so quickly from the 9/11 recession, and why unemployment was so low from 2004-2006.
Then as soon as the Democrats took over and threatened to repeal the tax cuts, people got scared, stopped spending, the economy slowed, and people started losing jobs.
Based on that trend, you could predict what happens if an administration raised taxes, handed large sums of money to politial cronies, and proposed large, complicated, high-tax proposals that made it scary to hire new employees, as you wouldn't know what legal burden you might have unwittingly accepted: unemployment soars!
Well, that's what President Obama and the Democrat-dominated Congress did, and by George, that's what the unemployment rate did in response.
The only way the unemployment rate is going to drop is if small businesses get the business and have the confidence to hire new workers.
Why do so many Democrats insist on denying models that actually have predictive utility? There is no predictive utility to any socialist economic model, and it has been proven time and time again. Hopefully President Obama has proven it beyond any shadow of a doubt this time. The party and ideology identification giving Republicans and conservatives a double-digit lead over Democrats and liberals makes me hopeful.
Didn't the tax reform of 1987 lower the top rate to 28%?
And let's not forget that the payroll tax was effectively doubled during the Reagan Administration, as part of the Greenspan commission compromise.
Madmadmadmadman: The entire concept of tax cuts paying for themselves depends on revenue climbing but gdp climbing more. It seemed like you were throwing that out there as a complaint about his claim that revenues went up. If so, you have utterly failed to understand the Laffer curve and all related arguments. Revenue as a percent of gdp is a measure of overall tax rates, not of revenue. Claims from places like cbpp.org often amount to saying "tax rate reductions lead to lower tax rates". I've already documented this once, on this blog, but reagan ended his term with lower tax rates but higher per capita total revenue corrected for inflation.
"... Well -- [Bush] and the Republican Congress."
Megan,
Are you operating under the delusion that Bush only had Republican Congress'?
Because that is not the case. Nancy Pelosi has been the Speaker of the House of Representatives since November 2006. The House initiates all spending bills. The President only gets to sign what gets passed. He cannot veto the budget.
He cannot veto the budget. Yes, I believe he can (subject to congressional override), just like any other bill. Though I think it would be unprecedented. Or am I missing something in my review of the Constitution?
Actually, the budget is a concurrent resolution and is not sent to the President to sign (or veto). On the other hand, it does not have the force and of law and is generally ignored after it is passed. Bush could have vetoed the approps bills - but it is the entitlement spending (not the annually appropriated spending) that is the problem.
As a practical matter, the President cannot veto either annual appropriation bills, nor entitlement spending.
It really doesn't matter whether the President has the power granted in the Constitution to do it. Because the Congress has made it, as a practical matter, impossible in order to remove this power from the Executive.
The Judiciary has allowed the Congress to get away with that.
MTG: I assume you mean Congress has made it clear that it will override any such veto. Correct me if I'm wrong, but please explain in detail and/or provide a link. Also, do you mean the matter has been presented to the Judicial Branch by a competent party (i.e. the Executive)? If so, when? Because the S.Ct. isn't about to step in without express invitation. Nor should it.
I think that "as a practical matter" it depends on the politics of the moment. Though I can't think of any time in modern history when the President could have gotten away with such a veto.
I think the President can veto a budget --
but it amounts to a high stakes game of chicken.
Without an approved budget, no government expenditures can take place, and government shuts down.
I seem to recall a Gingrich / Clinton standoff that had the government shut down for a day or two, or perhaps come within a day or two to shutting down.
As usual, movertyperguy sets the standard for pots, kettles and inky blackness by suggesting someone else is delusional. The two major pieces of legislation we're talking about in this post and on this thread are...
1) the Bush tax cuts, enacted in 2001 by a Republican Congress and signed by Republican President George W. Bush, and
2) Medicare Part D, enacted in 2003 by a Republican Congress and signed into law by Republican President George W. Bush.
We can ALSO blame the Dems for being on board with Medicare Part D, we can ALSO blame the Dems for widening the structural deficits under Obama, and we can ALSO blame the Dems for extending the Bush tax cuts when that happens. What's so difficult to understand about that?
Megan, or anybody: Is that $200 billion what the actual (nominal) number is projected to be, or is that figure in 2009 dollars, and the actual number in 2019 is expected to be larger in nominal terms? Reason I ask is, based on your reasoning, it would be interesting to attribute a percentage of "blame" to Bush for 2019's deficit. The $200 billion figure doesn't tell us that much with respect to the question of how much of 2019's deficit is Bush's responsibility. Will his policies prove to be responsible for a third of the projected deficit that year? Ten percent? Two percent? Anybody know? I recall a number of warnings being made about "trillion dollar deficits" a full decade from now, so I would assume W can claim a fifth of the blame for the deficit a decade from now. But if that $200 billion figure has to be adjusted upwards to account for inflation, his blame, too, has to be adjusted upwards.
"The other major contribution that Bush made was the atrocious Medicare Part D"
I always figured that prescription drug coverage would be added sooner or later, and at least Bush set it up in an efficient way that offers choice and competition. If Obama was designing it, it would cost far more because the 'competition' would be through a large government bureaucracy that set prices (a public 'option').
Ummm . . . yes, but it was Bush's decision not to finance it. Besides, if I limited myself to complaining about things that were politically unlikely, they'd drum me right out of the Libertarians Club.
Bush's decision not to finance it
It was also Bush's (and the Republican Congress's) decision not to finance the Iraq or Afghan wars. Well, not by actually asking the American people to pay for them upfront. Remember, "Deficits don't matter."
Not that Obama or the current Congress are proposing to finance them, either...
About 30%, give or take--they're all done in current dollars. GDP will be larger. But so will the deficit, which the CBO says will be about $700-750 billion if the Bush tax cuts expire and things like the AMT and SGR "fixes" stop being done. The actual likely scenario is a deficit on the order of $900 billion, of which the Bush problems will account for something above a fifth.
When was the last time the CBO was right about anything? Seriously I'm curious.
Im confused, obviously the Iraq war and simultaneous tax cuts will have expired by 2019. But that doesn't mean that over a trillion dollars (a conservative estimate) wasn't wasted that could have been spent otherwise, say, paying down the deficit?
Yeah that's the biggest problem I have with simply writing off the Iraq War, the tax cuts, etc. What about opportunity cost? Impossible to quantify, of course. But worth thinking about.
That was covered in the bit about the additional $100B/year in interest costs. It might not be precisely the opportunity cost, but it's a good approximation.
Jeff, while you might be right, I think you are missing the point. The "deficit" represents an annual cash flow. The troubling deficit projection we are facing for fiscal year 2019 is evidence of a long-term structural deficit that will continue far beyond 2019, and that our economy cannot sustain. And none of that annual cash flow in 2019 will be from either the tax cuts or the Iraq War -- other than the increased debt service payments flowing from those policies. Bottom line: it can be simultaneously true that both (1) we increased the national debt significantly because of the tax cuts and the Iraq War, and (2) the tax cuts and the Iraq War will have only a negligible impact on the long-term fiscal imbalance that threatens our economic health going forward.
$200 billion is only one fourth of the "stimulus bill". It is only one eighth of the current fiscal year deficit! Hoe can you make a moral eqivalency argument about that!
Also, President Bush approved a lot of spending that he was pushed into by Democrats, Like Medicare Part D. Also, 9/11 caused a lot of lost revenue. That was not President Bush's fault, that was Janet Reno, Eric Holder and the Clinton Justice Department's fault.
President Bush made enough mistakes to get a lot of blame, but the meme that he was responsible for our deficits is crazy.
Finally, the Democrats took Congress in Novemember 2006. When did the stock market go down and the housing crisis occur? IN 2006 the stock market was, I think 14,500.
Why does no one assign responsibility to the leftists where it obviously belongs? They trash and tax business and people who create jobs and then blame others when jobs are lost?
By the way, if private health insurance is eliminated, has anyone calculated the lost taxes to government by the substitution of those taxpayers with more government employees to run the government plan?
Look, I'll give you the same response I gave to Zosima: ultimately, the fact that he had a bunch of bad choices does not absolve him from the responsibility to choose wisely. He chose to pass Medicare Part D without paying for it. That's on him, not the Democrats.
The stimulus bill and 2009 deficit are one-time(god willing...), the portion of the deficit Bush is responsible for is ongoing. Also, if you're going to pick one person to blame for 9/11, I believe Osama bin Laden is the traditional choice.
Let's not make a tradition of it and call it "the conventional choice". Mostly because I think traditions should honor something.
Since they are all financed with debt, it's actually the same. The interest payments will be ongoing for the stimulus just like the wars.
True. If you want to allocate a few percent of the stimulus package to Obama's share of the structural debt, I'm all for it. But comparing 200 bil every year to 800 bil one year is silly. The correct comparison is 200 bil to the carrying cost of the 800 bil, which is maybe 30(depending on interest rates, ofc). Now, that's 30 on one bill, which is a whopping big sum, but it's not up to the level of Bush's whole term just yet.
Re: Also, 9/11 caused a lot of lost revenue. That was not President Bush's fault, that was Janet Reno, Eric Holder and the Clinton Justice Department's fault.
Partisan claptrap. The blame for 9-11 belongs with Osama bin Laden and his henchmen.
Re: When did the stock market go down and the housing crisis occur?
And this is worse. Are you seriously suggesting the housing bubble could have inflated indeinitely with a GOP Congress?
Re: By the way, if private health insurance is eliminated....
Do you live in an alternate reality.? The elimination of private health insurance is not even in the building, let alone on the table.
"There is a right way and a wrong way to blame George Bush for future budget deficits. The wrong way is to get mad about his tax cuts and the Iraq war. By 2019--the end of the budget window, and the period with which us structural deficit hawks are concerned--the Bush tax cuts will have long since expired. We are also scheduled to have withdrawn from Iraq. You cannot explain any portion of the 2019 budget deficit with these two factors."
This is simply wrong.
1. Part of the deficit is paying interest on previous deficits. Any deficit built under president X will be a portion of future deficits because of this.
2. Pulling out of Iraq will not end costs associated with the Iraq war. Paying for medical care for veterans and replacing equipment lost, damaged or worn out will continue for many years to come.
1. That's the increase in the net interest on the debt that I specifically attributed to George Bush; otherwise, he'd only be responsible for ca $100 bb
2. This is not World War II; we didn't get millions of veterans who otherwise would not have joined the military. This increases our expenses somewhat, but not enough to be very important in the context of a $700 bb to $1 tt deficit.
1. Is there a slight-of-hand in your post, titled "budget deficits", but then you defend the case against _future_ budget deficits only?
2. Not much fault of the tax cuts? They went hand-in-glove with the abandonment of pay-go, which had served well for the party of responsibility, the Democrats, in the 1990s. As you know, the pay-go rules were forged in reaction/horror/fear over the Reagan-era cut-taxes-and-boost-the-military.
3. Increased structural cost of the military is de minimus in your view, under the table-pounding "support the troops" battle-cry of 2004 and more? Try this chart, maybe?
http://3.bp.blogspot.com/_yEo2CYoHMmA/SvmtRpnxNVI/AAAAAAAAB5U/FRk26w6t9XQ/s1600-h/Veterans+Spending.png
4. Medicare D is one thing, but why do you not include the failure of the Republicans to address the existing structural budget problems under Bush? Do you view it as all the fault of the Dem in Congress? At least Gore went on-and-on about a "lock box", etc.
a) The strucutral problems we're facing in the future were also not dealt with by Bill Clinton, George HW Bush, Ronald Reagan, Jimmy Carter, Gerald Ford, Richard Nixon, etc. They have been known about since the sixties, and nothing has been done. George Bush is not specially culpable in this regard. The structural budget deficit he left outside of the coming entitlement problems was minimal
2) He tried to deal with Social Security, and was prevented by the Democrats
3) I've been talking about future budget deficits. What's the point of blaming George Bush for past deficits? I mean, it's true, but it has zero political relevance. The important part is where Democrats try to fend the entire future deficit off on Bush, which is not true. He accounts for an important small fraction of it.
"2. This is not World War II; we didn't get millions of veterans who otherwise would not have joined the military. This increases our expenses somewhat, but not enough to be very important in the context of a $700 bb to $1 tt deficit."
We do have 30,000+ wounded veterans along with (estimated) up to 200,000 with psychological problems that have to be dealt with. Estimates for cost to the VA for these troops range from $100 billion to $700 billion over their lifetimes.
Your right about one thing- this isn't WW2- WIA v KIA ratio for WW2 was 2-1, in Iraq its more like 15-1. These soldiers who are making up the difference are the most debilitating types of injuries, amputation, serious burns ect. These, along with psychological trauma, are the most expensive and longest term injuries to treat.
Congress funds Executive actions;
Both get their logs rolled.
All same-same the Devil's Bargain
which gave foreign Policy to the Pubs
and Domestic policy to the Dems, during
the Cold War, with the result that
"educated" people today do not understand
the importance of the defeat of the
Evil Empire.
What about the AMT, Megan? And you bring up the fact that the Bush tax cuts are set to expire soon . . . well, the only way we could "afford" these tax cuts in the first place is if you assume (1) the AMT patch will expire, and IRS can collect on the revenues, and (2) the bush tax cuts will expire as planned.
But you and I both know these are deliberately laid political land mines. Let either of these cuts expire and suddenly you're a "tax and spend" politician (which is what you have to do just to break even) or extend the cuts, and end up with massive deficits.
But I don't blame the deficits on Bush, I blame them on Republicans and conservative Democrats, who have for some reason decided that taxes can never be raised, ever, for any reason, regardless of what it costs to run the greatest nation on Earth.
A while back you wrote a post about how Pols don't really care about deficits. And I think you're right about that. But why are deificts always a cudgel to beat up liberal priorities? Why do they only matter when we try to make Americans lives a tiny bit better?
You're not concern trolling about deficits because you're worried about deficits, you're concern trolling because those deficits are paying for things which you do not support. You don't like the stimulus, you don't like health care reform, so you focus in on the rise in the deficit.
It's fine to criticize Obama and the Democrats for front-loading the revenues and back-loading the costs, but I find it hard to take your criticisms seriously unless you also admit that they are front-loading the tax hikes and back-loading the actual improvements in people's lives. And you also must acknowledge that, like Democrats counting on future congresses to never lower reimbursement rates, Bush counted on future congresses never letting any of his tax cuts actually expire.
I am genuinely worried about a 6% structural deficit, not worried about it because it's a convenient fig leaf. If Obama beats it back to 2-3%, I will be only worried they way I was about Bush deficits--as a signal that we are passing debts onto our children that we should pay for ourselves. But I am seriously worried about this, and I would be worried if there were a Republican president who wanted to pass "deficit neutral" tax cuts using the same spending cuts Obama has proposed--in fact, I think taxes have to rise. A 6% structural deficit is just not sustainable, and I don't know how we're going to fix it.
AFAIK, I haven't criticized Democrats for front loading the tax cuts and back loading the costs, and if I did so, it was very much in passing. As far as I am concerned, that is not the main problem with the bill, which is nominally deficit neutral/positive in 2019. You are arguing with a fictional conservative who believes things you don't like.
Why are deficits "always" a cudgel to beat up liberal priorities? Did you sleep through the last eight years, when Democrats were using deficits as a cudgel to beat up Bush on tax cuts and Social Security reform? Deficits are always a cudgel to beat up your opponent, full stop.
But let me be clear: I think these deficits are a problem, not a cudgel. I think that the health care plan makes these deficits more dangerous. But even if the Senate actually makes all the spending cuts it promises, we still have a huge deficit problem, and we've already used the most obvious mechanisms to close it on the new health care bill, instead of the old deficit. As I've said several times, I think tax increases are going to be a big part of the solution. This isn't about what the particular solution is; it's about the fact that we need one, ASAP.
Can we make it a little bit about particulars, at the risk of becoming controversial?
We could settle the Bush-Cheney debts of this country more quickly as Roosevelt did the war debt. Of course, he partly used a wealth tax (not an income tax). You up for that?
If taxes are a "big part of the solution", does that mean that Republicans are part of the problem in America?
Their recent manifesto, as you know, calls for ... wait for it ... lower taxes.
Here's the compromise: we'll pay for the "huge" Obama stimulus with an income tax on the middle class and pay for the Bush & Reagan debt with a temporary, "catch-up" wealth tax and various other, temporary high-income/high-consumption taxes. Deal or no-deal?
Maybe some day you will learn to blame liberal Democrats too for pushing the false claim that everyone can have everything they want by only taxing 1-2% more heavily.
It is not just the two you mention who play the political game that government can be all things to all people at minimal cost. The fact that they must to get/stay elected should speak to how well people feel the government uses their money.
Might as well blame W for the deficits because he forgot to leave Obama the Big Red Veto Pen.
Well, a lot of these arguments pretty much equate to present and future Congresses and Administrations having no real control over anything. We should just quit sending any to Washington since we are screwed anyway.
I'm down with that.
Agreed. Nobody is responsible for the past, present, or future, and past failure is the excuse for screwing up more. We could be better off paying them to go staff homeless shelters in their home states instead.
Um, the defense budget in 2000 was $260B. The defense budget in 2008 was $480B. These numbers, of course, do not include spending on wars. Those were accounted for by "emergency appropriations" of about $150-$200B a year.
So the difference between 2008 and 2000 numbers, that's an extra $200B to throw onto Bush's account. No blaming Obama for not "repealing" that. I would love to see him do it, but let's be honest: there is no expense in Washington that's stickier than the Pentagon. Those numbers don't go down.
Let's see. Oh, this. The 2000s were largely a lost decade because we had little real economic growth. Much of the growth of the 2003-2006 time frame just vanished in the recession, because it consisted of building way too many houses than we could afford. So we lost a decade of real growth and the business investment that goes along with that.
I can't measure that, but it's pretty substantial.
Right, I forgot about how George Bush used to sneak out of the White House and sell exurban real estate on the weekends.
Why the snark? I don't get it. I mean, I get the joke and it was cute, but I don't get why this post deserves a snarky rejoinder. That seems like a substantive critique, if the numbers are right.
The average progressive complaint is that the average fiscal conservative rails against entitlement spending but studiously ignores military spending. Don't start being average on us now.
The military spending is supposed to end, particularly in Iraq, which is the expensive bit. I'm not really going to blame Bush for Afghanistan, because like most Americans, I supported overthrowing the Taliban--I don't think any president would have done differently.
Iraq, he owns. But unless Obama suddenly and for no apparent reason decides to extend our stay there, that part of the military budget will have dropped out by 2019. In other words, it's not structural.
But that misses muzzy's point. As I read it, he's saying that the defense budget ballooned from $260 to $480 annually not counting the annual "emergency appropriations of about $150-%200B a year."
What accounts for the additional $210 billion annually, exclusive of the actual war costs? I'm guessing it falls into three big buckets: generally stepping up anti-terrorism measures in the wake of 9/11 (e.g. creating the Homeland Security department), indirect expenses from the Afghan and Iraq wars (e.g. heavier recruiting costs, or higher medical costs), and the usual list of speculative military projects/hobby horses/playthings.
Some of these increases in spending would likely command broad agreement, especially some of the anti-terrorism measures. Other increases, like continued spending for the F-22, probably would not. But whether we agree with them or not, many of them (e.g. the Homeland Security department) would seem to me to be clearly structural.
And if they're structural, they ought to be debated, and they ought to be included in George Bush's legacy of structural deficits. I'd never learned "normative" vs. "positive" until I looked it up after reading this post, but isn't this just as clear an example of the difference as healthcare?
I have no problem with judging President Bush with $200 billion of deficit. There are ways to disagree with that, but I'm not an economist.
However, I take great exception to the idea that "Democrats have every right to be angry about it."
They have no right to be angry about it.
It was the actions of the Democrat-controlled Congress that caused the economy to slow down in 2006 and collapse in 2008.
1) They talked about rolling back W's tax cuts, which immediately caused consumer confidence to go down
2) They loosend all sorts of restrictions in credit for housing, requiring lenders to make too many risky loans for "social equity" reasons.
3) The kicker: on Medicare part D and other spending proposals, Democrats complained the Bush didn't spend enough.
The Democrats have never demonstrated any intent to cut spending. Their normal method of operations is to raise taxes to increase revenue to increase spending. If they don't have the power to do that, then they raise spending to raise the deficit to give a pretext to raise taxes.
Either method results in the economy you see in the US today.
The Democrats have zero room to complain about any negative economic results. The Democrat platform depends on negative economic results even more than magical unicorns.
But roughly $200 billion is not small change. It is a very large sum, and the Bush administration was behind every extra dollar we'll be spending. That's making Obama's job harder, and Democrats have every right to be mad about it.
No -- you and I may have every right to be mad about the $100 billion for Medicare Part D, but the Democrats don't (because, as you say, their objection was that it wasn't big enough). So, the Dems can legitimately bitch about the extra $100B for debt service, but that's about it.
To many of your readers, the difference between cyclical and structural deficits gets lost in the noise. Try this:
A man and his wife work hard at their jobs and make a lot of money this year. To reward themselves, they fly to New York City to window-shop on Fifth Avenue, eat a nice dinner and take in a Broadway show, all of which they charge to their credit card to be repaid over the following month or two.
Another man and his wife work just as hard and make just as much money. To reward themselves, they adopt a special-needs child.
The first couple have a cyclical deficit. It'll be paid for shortly. The second couple have a structural deficit. It will never be "paid for."
True, the money spent on dinner is gone and can't be used for other expenses. True, there's interest on the credit card. But these are temporary issues; they don't realign the long-term course of the first couple's financial future. Blame Bush II for the bailout and the war but eventually the spending will stop. Not so for Medicare Part D. He gets some blame for that, just as FDR and LBJ get it for their grand social schemes.
Obama's stimulus spending is a dinner (albeit a really big one charged to a variable interest rate card) that eventually could be paid for; it is not a child. Obama's health insurance reform proposal is a special-needs child that never will be "paid for."
Just as there are legitimate moral reasons to justify adopting special-needs children, there are legitimate moral reasons to reform health insurance laws. But as a matter of money, it's still a major realignment of the course of the nation's financial future.
People who adopt special-needs children know that and they're willing to make adjustments in their other spending to afford it.
Are we?
If not, maybe we should call for the check and leave now.
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Joe, that's a thoughtful post and a helpful analogy. Kudos and many thanks.
Very clever and useful.
Can we extend your analogy?
The Bush tax cuts were like opening up a tab for dinner, not just dining out once.
He may have been the first, in modern memory, to suggest paying for a cyclical slump when he took office with a structural change, tax-bracket relief. The wealthiest people in the country ended up with a 15% tax bracket, alongside some of the poorest.
The fact that his messy ideas "expire" was a Democrat-led insistence. If Bush-Cheney had their druthers, there would have been no expiry.
Finally, there is a twist to the story.
Bush-Cheney are indeed more culpable than other Presidents, in failing to deal with the structural deficits. The OASI surpluses (social security) that aided their budgets were larger for them than for any President that went before them. This may be true for Obama, as well, but it is less likely, because the severity of the economic slump will cut the OASI surpluses dramatically.
Let's not forget that Bush did a little bribing and hedged his bets on the "messy" ideas of supply side to deal with cyclical slumps. To get his tax cuts each round, he made deals with Democrats for larger tax credits, and mailed checks to people (direct spending measures despite government not directing its use). He also allowed Congress to spend wildly.
He did not wholesale believe in or implement policy as you have described it. Even if it were true, he would not have been the first...even in modern memory.
This is from the treasurydirect site. (I remember a Bush State of the Union where he said something about Treasury accepting checks if you feel your taxes are too low.) What would be the economifications if citizens started voluntarily making payments to reduce the debt? Would the rest of the world see this as a positive for the US currency?
How do you make a contribution to reduce the debt?
Make your check payable to the Bureau of the Public Debt, and in the memo section, notate that it is a Gift to reduce the Debt Held by the Public. Mail your check to:
Attn Dept G
Bureau of the Public Debt
P. O. Box 2188
Parkersburg, WV 26106-2188
I read an article about this a few weeks ago. I considered donating, but decided not to for several reasons:
1. I'm pretty sure my donation is hijacked from my paychecks before I see the money.
2. Since I'm part of the slightly more than half the country who actually pay income taxes, I'm already making double donations!
3. These donations aren't tax deductible like my others.