Your Opinion: Deficit blame
Saturday, June 18, 2011
The U.S. budget deficit has gone from $455 billion in 2008 to $1.6 trillion in 2011. Some Republicans blame this huge increase in the deficit on President Obama. That is absurd.
Our present deficit is the result of Bush administration policies. First, the Bush tax cuts of 2001 and 2003 will have cost the U.S. Treasury over $2 trillion by the time they expire in 2012.
Second, the unnecessary war in Iraq has cost the country $900 billion, so far, not to mention 4,400 Americans killed and 32,000 seriously wounded. That war was unnecessary because those weapons of mass destruction that we were going to remove have never been found. Saddam Hussein had no ties to al Qaeda, and we have not and will not spread democracy in the Middle East by making war in Iraq.
Third, the Bush administration’s utter failure to regulate the financial markets, in particular mortgage lenders and investment bankers, led to the greatest financial collapse since the 1930s. That collapse in the fall of 2008, combined with the recession that started the previous December, cost the economy 8 million jobs, millions of home foreclosures and a stock market crash. These losses, of course, meant sharply lower tax revenues for the government.
The Bush tax cuts plus the loss of jobs, homes, and stock portfolios have caused federal tax receipts to drop from over 20 percent of GDP in 2000 to less than 15 percent of GDP in 2010 (www.omnwatch.org/node/11656). That five-percentage point decline in tax revenues comes to about $700 billion.
All of this, the $700 billion in lost revenues and the $900 billion in unnecessary spending in Iraq, go a long way toward explaining our present budget deficit. And these lost revenues and unnecessary expenses were the direct results of Republican policies. That is why it is absurd for Republicans today to try to blame our unhealthy fiscal situation on Obama.
With the next round of presidential electioneering getting underway, it is worth remembering which party’s policies caused the horrendous mess we are now in.