Look: I am eager to learn stuff I don't know--which requires actively courting and posting smart disagreement.

But as you will understand, I don't like to post things that mischaracterize and are aimed to mislead.

-- Brad Delong

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Wednesday, June 1, 2011

Republicans, All Wrong, All the Time, - Pt 29: Moron More On That Deficit Thang

Randi Rhodes had a right righteous rant on the radio yesterday about the deficit.  It belongs to the Republicans.  I went on a quest this morning to track down some of the background information.

The components are base Pentagon budget, wars, homeland security, the Bush Medicare Prescription plan, TARP,  and the Bush tax cuts.  That's all on top of the Reagan legacy of $1.8 trillion.

Here is the military and security portion since 2001, totaling about $8.2 trillion.  This truth-out article puts it in perspective.

I couldn't find total cost to date for the Bush prescription drug plan.  But for 2009 alone it was over $60 billion - way under original cost estimates!  A simple minded estimate of $360 billion since 2006 should be in the ball park..  The tax cuts link below pegs it at $272 billion.

TARP was originally slated at $700 billion, though it wasn't all tapped, and, presumably, most of it will be payed back, eventually.

The Bush tax cuts, with the B. Hoover Obama extensions total $2.8 trillion.  As this link points out, the actual dollar value estimate contains a lot of what-ifs.  The most favorable estimate is $1.3 trillion.

Using the favorable estimate, and eliminating the TARP contribution, I get a total of $11.6 trillion from these items.

Another $730 billion can be added to that total from the revenue shortfall resulting from the recession.  I took the 2006 to 2008 average of Federal receipts as the base line, and determined the shortfall from 2009 and 2010. Data source.  Now we're at 12.3 trillion.

Of course, the '09 and '10 deficits are inflated because government expenses rise during a downturn, so the deficit gets a double hit.  Remember also that the cause of this downturn is a shortfall in demand resulting from decades of Rethug economic policies.

As an aside, interest on the Rethug generated national debt has totaled $3.4 trillion since 2001.

The way I summed it up about 6 months ago still holds.

To recap, here is my narrative:  Throughout the 20th century and up to now in American History, there have been two main causes of large federal budget deficits

1) Wars, and war-equivalent (frex: Star Wars) spending on the military.   Military expenses
in a single year are now in the range of  the total cost of WW II, in constant 2005 dollars.   And we are not fighting the Wehrmacht!

2) Tax cuts.

And we should add 3) Revenue short-fall due to a depressed economy at a time of record corporate profits.  That in itself should tell you how massively screwed up things are.

To be blunt, spending on domestic social programs has NEVER been a significant contributor to deficits, except during the original Great Depression, when they were actually quite modest.

Here is a different view of the numbers.  I don't go along with all of the text, but the graphs tell the story vividly.

Bottom line:  Not only are we totally screwed, the screwing has come from Repugnicants.  Same as it ever was.

1 comment:

The Arthurian said...

Not only are we totally screwed, the screwing has come from Repugnicants.

It is all part of a master plan. In "Starve the Beast" PDF (2007) Bruce Bartlett wrote:
In the 1980s, public-choice theory developed the idea that a conservative government might intentionally increase the national debt through tax cuts in order to bind the hands of a subsequent liberal government...

Perhaps a future fiscal crisis will provide political cover for massive cuts in entitlement programs that would be politically impossible except in such dire circumstances.

It seems everything is going according to plan.