What's Causing The Deficit?

Well, here's a thing.  When Bill Clinton left office, the CBO projected $800 billion surpluses for 2009-2012.  Now that same office is predicting - with rather more certainty, one would think - $1.2 trillion deficits for the same years.

The above-linked article attempts to figure out why.  Here's the key points:

• The biggest chunk of the projected deficit is from what the article calls "the business cycle."  Certainly there was a recession earlier in the decade, and we're now in the Great Recession or whatever it's being called.  This accounts for 37%.
• Coming in at a close second is George W. Bush's signature domestic policies, like his tax cuts and Medicare Part D.  These account for 33% of the projected deficit.  Let's remember this.
• 20% of the projected deficit is due to Obama continuing various Bush programs and policies.  The Iraq War continues to be a huge drain on our nation's finances.  The tax cut for people making under $250,000 and the Wall Street bailout are in this category.
• The stimulus bill accounts for 7% of the projected deficit. 
• Obama's proposed plans for health care, education and energy reform account for 3% of the projected deficit.  According to the article, "If the analysis is extended further into the future, well beyond 2012, the Obama agenda accounts for only a slightly higher share of the projected deficits"

Unfortunately, the second half of the article completely ignores the first half, serving up the normal mish-mash of GOP operatives regurgitating GOP talking points about deficits and spending cuts. 

What really matters is that George Bush's key domestic policies are shown to account for 53% of projected deficits.  It can also be legitimately argued that what the article euphemizes as "the business cycle" is at least partially Bush's - and the GOP-controlled Congress that rubber-stamped everything he wanted - responsibility.  Certainly dismantling the regulatory regime in the financial sector hasn't helped us very much.

Along with making sure that George Bush and the GOP Congress don't escape their huge reponsibility for our deficits, we need to all understand just how little of the deficit is because of Obama's proposed social programs.  Health care reform will not bankrupt the country.  Period.  The proposed reforms - hell, progressives' most fevered dreams of sinlge payer, socialist utopia - will not cost as much as Iraq.  They won't cost as much as Bush's tax cuts for the wealthy.  They won't even cost as much as the ongoing Wall Street bailout.

Even assuming that we manage to not start any wars of conquest and that giving crooks on Wall Street blank checks isn't going to become a yearly habit, healthcare reform will take many years to cost as much as these boondoggles, and unlike either Iraq or Wall Street, healthcare reform has a lot of ways to pay for itself. 

The 3% of projected deficits made up by healthcare reform and other social programs is getting so much attention and causing so much distress - and getting the blame for the entire deficit, usually - because the real divide in this country is not left and right, or religious vs. secular.  The real divide is between rich and poor, between the ultra-wealthy and everyone else.  Wars are fine, bailing out Wall Street is just a given, but if any money goes toward helping union members at a car company or to provide health care to the working poor, then the moneyed interests - and their lackeys in Congress and the press - gear up for all-out war.

Spread these facts around.  I don't care if you link to this post or not, I really don't.  But people need to know and be reminded about what is actually causing these deficits and what steps we can take that would actually reduce them.  Killing healthcare reform won't do anything to solve our deficit problem, but ending the Iraq War, restoring some sanity to our tax code and telling Wall Street that they're now welcome to start doing business the way they say they want to, will help.

Comments

[has_te]

Exactly.

The proposed reforms - hell, progressives' most fevered dreams of sinlge payer, socialist utopia - will not cost as much as Iraq.

The metric I've really liked is that ONE month in Iraq would buy Cat5 hurricane protection for the entire Gulf coast...
And one is happily reminded, however much unbid, of...Katrina.