As the year heads for summer, Republicans are determined to flood the political conversation with attacks on President Obama over deficits and the national debt. During Obama’s presidency, the national debt has increased from roughly $10 trillion to a record high of $15 trillion. This looks bad for the president, but appearances are highly deceptive. The president’s decisions and policies are only slightly to blame for the debt increase, and the vast bulk of the increase and the total stem from “policies enacted during the Bush administration coupled with automatic increases in federal spending and decreases in tax revenue triggered by the economic downturn.”
As Republicans strive to obscure the economic facts of life while pushing debt and deficits to the center of our political discourse, a quick reminder of the truth is in order. The major drivers of the deficits and thus the rising debt of the last decade are the wars in Iraq and Afghanistan, the Bush tax cuts, and stabilizing policies meant to combat economic downturns. Recovery measures by both Bush and Obama had a short-term impact on the deficit, but have mostly phased out. A chart depicting the interplay of these factors appears below.
From the time President Obama won the election in November 2008 and with rising frenzy and ferocity since their victories in the 2010 mid-term elections, Republicans have raised alarms about deficits and debt as a pretext for attacking spending of social programs. The cloak of fiscal responsibility, however, hides the true Republican agenda enshrined in numerous budget proposals. They want to slash spending for the poor and elderly, increase defense spending, and cut taxes on the rich. The GOP platform would drastically alter the nature, scope, and size of government, but it would address deficits and debt quite slowly if at all. Let us recall that the last Republican president took office with a budget surplus and debt on a downward course.
The Republicans have repeatedly described President Obama’s budget proposals as “deficits built to last.” They seek to make a play on the president’s call for “an economy built to last.” The Obama proposal is substantially different from Ryan’s so-called Path to Prosperity which every Republican in Congress and Mitt Romney has endorsed. “Obama’s proposal maintains the basic shape of the social safety net. It draws down deficits over the coming decade with a mix of tax increases on high income earners and corporations, already enacted spending cuts, and additional cuts to health care spending and other programs. Ryan’s budget calls for huge cuts to the safety net, makes Medicaid a block grant program, and, after a decade, for phases out Medicare. Ryan also proposes significant tax cuts for the wealthy and corporations. Contrary to the heated rhetoric, the Ryan plan produces – deficits built to last! Furthermore, both the Ryan plan and the Bowles-Simpson plan are based on economic assumptions that became more dubious during the past year. Consequently, their deficit projections are outdated and probably more optimistic than realistic.
In fact, there is an even better alternative to the Republican slash and burn budget. This budget has more of what Americans say they want — new taxes on the rich and cuts to defense — than either the Ryan plan or the president’s budget. And it has none of what Americans say they hate: changes to the social compact that’s guided America from the days of the New Deal and the Great Society. “This is more than a fantasy document. It’s sound policy. The conservative Economist magazine has called the budget courageous.” This is the proposal of the 75 member House Progressive Caucus.
The Progressive budget by slashing $5.6 trillion in deficits on the way to generating a small surplus in 2021—reaches a balanced budget two decades in advance of Paul Ryan’s plan. The following chart shows this clearly.
If the citizenry does not get beyond the heated and deceptive rhetoric trumpeted by the Republicans, their ignorance could lead to dreadfully erroneous decisions in November. For many of our most vulnerable countrymen, such mistakes could literally be lethal. In 2012, ignorance is not bliss; it may be the kiss of death for a just and prosperous society. The truth will set us free, but weary or willful ignorance on the part of a majority of voters will doom us all.
Tags: deficits, elections, Larry Conley, Mitt Romney, Nathional Debt, Paul Ryan, President Obama, prosperity, Republicans, Voters