is really much ado about nothing, relatively speaking. It is just a Republican Party talking point designed to misinform the public – propaganda.
Your hear and read about Republicans and their supports screaming about the high level of the United States’ budget deficit in proportion to GDP. Woe is us for the sky is falling because of the "extraordinary" high budget deficits.
After the jump, budget deficit data, in chart form, will be presented for four presidential eras in U.S. history. Hopefully, the chart will help you gain additional insight into the U.S. budget deficit and the sophistic arguments of the Republican Party and its supporters.
In the traditional media (aka old main stream media) and via Republican pronouncements, fretting over the budget deficit is rising to a fever pitch. A sampling of such worry is provided below.
In his New York Times Op-Ed, "Fiscal Suicide Ahead"; David Brooks suggests the possibility of federal budget suicide because of large budget deficits. Enclosed is a passage from Brooks’ Op Ed.
Obama inherited a $1.2 trillion deficit and has quickly pushed it up to $1.8 trillion, a whopping 13 percent of G.D.P. The new debt will continue to mount after the economy recovers. The national debt will nearly double over the next decade. Annual deficits will still hover around 5 percent or 6 percent of G.D.P. in 2019. By that year, interest payments alone on the debt are projected to be $806 billion annually, according to the Congressional Budget Office.
It’s nice that Mr. Brooks gives partial budget deficit credit to the Bush Administration. All the credit for the forecasted fiscal year 2009 budget deficit needs to be attributed to the George W. Bush Administration.
The failed economic policies of the Bush Administration and the unnecessary and immoral war in Iraq are the principal reasons that we are spending several trillion dollars on the bailout of banks, insurance companies and other financial institutions and a needless war. We should be spending this money on providing health care for Americans and other domestic programs.
In the Washington Post article, "GOP predicts doomsday if Obama budget passed" Congressional Republicans prognosticate a doomsday fiscal scenario for the United States. Excerpts from the article are provided below.
"The practical implications of this is bankruptcy for the United States," said Sen. Judd Gregg, R-N.H. "There's no other way around it. If we maintain the proposals which are in this budget over the 10-year period that this budget covers, this country will go bankrupt. People will not buy our debt; our dollar will become devalued."
Sen. Susan Collins, a Maine Republican who sided with Obama on his $787 billion economic stimulus plan, said she couldn't support the White House plan this time.
Having sampled a few comments of our Cassandras, let us with the aid of a chart review the factual history of federal budget deficits.
The information for constructing the enclosed chart was derived from Congressional Budget Office data, USGovernmentSpending.com, and other federal agencies. The chart will show the proportional relationship for federal budget deficits and Gross Domestic Product (GDP) for four presidential eras (FDR, Reagan, Clinton, and G.W. Bush). The data used for 2009 are estimates.
As the chart illustrates, budget deficits have been as high as 28 percent of GDP. A critical point to be made is that when we have had extraordinary high budget deficits and the borrowed money wass used to fund national objectives vice narrow interests the nation has subsequently prospered for many years. More importantly, budget deficits as a proportion of GDP declined in the years following such spending; probably because of GDP growth resulting from fundamentally, successful economic policies.
It seems to me that providing health care for all Americans, reviving the national economy, improving public education and establishing energy independence are national objectives worthy of a serious national commitment, and should be funded accordingly.
We shouldn’t forget that Republicans – using supply-side/sorcerous economic policies, Harry and Louise insurance advertisements, financial regulatory nonfeasance and hyped fallacious claims about Iraq’s weapons of mass destruction – propelled the nation into its present predicament.
I look forward to the time when the United States is on a different and far better national course than the present track.