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Originally posted to PoliticsOlogy

Even without the 2007 economic collapse, Bush was squandering our surplus. All the Republicans screaming about the national debt need to remember that.

Since Obama took office, the GOP has been relentlessly using the national debt as a justification for their proposed policies of severe spending cuts. But how did we get a debt crisis in the first place? By spending money like a coke fiend, George W. Bush squandered our national surplus on Iraq, Medicare Part D, and, most importantly, his fabled tax cuts; the debt GOP hates so much is entirely the consequence of their own economic policies.

In 2000, the Congressional Budget Office forecasted that there would be a six trillion dollar surplus accumulated by the end of the decade. This was based on the surplus in 2001, the result of the Dot Com bubble and Clinton’s tax raises. (Funny how Clinton presided over a growing economy and increasing taxes. Does tax guru Grover Norquist have a rebuttal?)

Rubbing his hands together at that forecast, Bush Jr. decided to snatch the money away from the wasteful government and give it back to the people. One problem: the CBO’s projection was based upon a bubble. When the Dot Com bubble collapsed in 2002, most of that surplus evaporated, but the money had already been spent by the American people buying houses they couldn’t afford.

(Well, actually most of the cuts went to the top 10% of wage-holders. So I guess that the money was spent on Apple products. See: Tech Bubble 2.0)

Today, we're $15 trillion dollars in debt. What would have happened if Bush had continued Clinton’s policies? Bruce Bartlett, a Reagan and Bush Sr. budget staffer, lucidly explained the CBO report in today’s New York Times:

Putting all the numbers in the C.B.O. report together, we see that continuation of tax and budget policies and economic conditions in place at the end of the Clinton administration would have led to a cumulative budget surplus of $5.6 trillion through 2011 – enough to pay off the $5.6 trillion national debt at the end of 2000.
By spending our cash with abandon, Bush robbed us of the most invaluable tools we have to end this recession. Without Bush, there would be no debt. There would be no argument about whether we’d be able to pay for more fiscal stimulus. Ben Polak and Peter Schott, Economist at the New York Times, ran the numbers and determined that
if state and local governments had followed the pattern of the previous two recessions, they would have added 1.4 million to 1.9 million jobs and overall unemployment would be 7.0 to 7.3 percent instead of 8.2 percent.
So when you hear Republican Congressional leaders complain about Obama’s profligacy, remember where it started. Bush was depleting our resources when the private sector was truly doing just fine. If he had merely followed Clinton’s trajectory, the debt would have been eliminated. Yet the Democrats are being tarnished as fiscally irresponsible? GOP orthodoxy connects slashing taxes rates with paying down the debt. Those two concepts are incongruent. As Taxmaggedon approaches it bears reiterating: government spending is not only sustainable, it’s necessary.

Originally posted to Cup of Joe on Wed Jun 13, 2012 at 09:34 AM PDT.

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Comment Preferences

  •  "Democrats tax and spend." (3+ / 0-)
    Recommended by:
    ricklewsive, TheOrchid, CupofJoe

    "Republicans let you keep your money and are fiscally responsible."

    It doesn't matter what actually happens.  They believe what they believe, and no amount of factual evidence will change that.

    President Romney will raise taxes and spend like crazy.  We'll point that out, and they'll say "Nope. Not true."  Or, "He's just fixing Obama's mess."  Politics hasn't been based on reality in a long time.

  •  It's not a bug; it's a feature. (3+ / 0-)
    Recommended by:
    ricklewsive, Gooserock, CupofJoe

    spend on their priorities and use the debt as the blame-driver to cut on yours.

    It seems curiosity has killed the cat that had my tongue.

    by Murphoney on Wed Jun 13, 2012 at 09:45:04 AM PDT

  •  There is yet another irony. (2+ / 0-)
    Recommended by:
    Murphoney, New Rule

    Without the reckless spending, and with a better ordered lending market, the current crash may never have happened.

    The entire thing was sparked by an overblown housing market, and reckless speculation.

    Now the poor, and the working people of the whole planet are paying the price.

    And the rich are still getting richer.

    I hope that the quality of debate will improve,
    but I fear we will remain Democrats.

    by twigg on Wed Jun 13, 2012 at 09:53:35 AM PDT

    •  don't forget the taxcuts (2+ / 0-)
      Recommended by:
      twigg, New Rule

      the specific redistribution represented by that bushdoggle helps to explain both tragic debt levels AND increasing equity gapping.

      It seems curiosity has killed the cat that had my tongue.

      by Murphoney on Wed Jun 13, 2012 at 10:06:23 AM PDT

      [ Parent ]

      •  The Tax Cuts (1+ / 0-)
        Recommended by:

        merely increased the deficit.

        They didn't, in of themselves, contribute much to the economic crash, however unwise they were.

        I hope that the quality of debate will improve,
        but I fear we will remain Democrats.

        by twigg on Wed Jun 13, 2012 at 10:14:38 AM PDT

        [ Parent ]

        •  Prior to the taxcuts, there was no deficit... (2+ / 0-)
          Recommended by:
          twigg, CupofJoe

          debt, yes, of course -- but the Bush taxcuts were born out of a budgetary surplus.

          Regardless, with additional revenue, whatever the accounting, Washington may have been more able to respond to the other instances -- if early response were bolder, the crash might never have been so large.

          Think of the possibilities for the housing market if the an austerity argument against mortgage bailout for those 1-home owners at the bottom end of the income scale had been more difficult make.

          I don't think it's reasonable to ignore the Bush taxcuts out of hand.

          Had the pain been more evenly shared, the worst harmed might have been spared and response would have been swifter and more sure.

          It seems curiosity has killed the cat that had my tongue.

          by Murphoney on Wed Jun 13, 2012 at 10:30:21 AM PDT

          [ Parent ]

          •  Well I wasn't ignoring them :) (0+ / 0-)

            Merely remarking that their contribution was to the deficit, not the crash.

            Deficits are also increased as a result of an economic slowdown ... That is, were it not for the crash, the deficit would really be only a minor issue.

            I hope that the quality of debate will improve,
            but I fear we will remain Democrats.

            by twigg on Wed Jun 13, 2012 at 10:47:28 AM PDT

            [ Parent ]

  •  I do not think "It's Bush's fault" will be (3+ / 0-)
    Recommended by:
    valion, VClib, erush1345

    a winning message in 2012.  

    It was a persuasive message after the President was in office one year.  Maybe two.  At some point, however, the voters say, Bush did bad stuff.  That's why we elected you instead of McCain -- because you said you were going to fix it.

    I agree with those Democrats who say that elections are about the future.  The President needs to give the voters the rationale for re-electing him for four more years -- what is his vision for the next term?  What will be his major policy initiatives next term?  I think that's where the President needs to focus, frankly.  

    "I'm not Bush" is not a particularly persuasive rationale.  

    •  I'm not saying it should be the message. But it is (1+ / 0-)
      Recommended by:
      New Rule

      political malpractice to let this be forgotten. Debt is more a Republican responsibility then Democratic one. That is important, particularly with the upcoming tax debate.

      Four years ago, people said that a Democrat couldn't win the foreign policy debate. Look at what's happening now. The narrative can be redefined. Understanding what causes a buildup of debt (tax cuts and wars) is central to crafting a coherent narrative going forward.

    •  It is to me, because it's partially true. (0+ / 0-)

      "..The political class cannot solve the problems it created. " - Jay Rosen

      by New Rule on Wed Jun 13, 2012 at 01:19:42 PM PDT

      [ Parent ]

  •  Retroactive history is fun. Anyone can play, (1+ / 0-)
    Recommended by:

    and no one can be wrong.

  •  CupoJoe - "it's Bush's fault" (1+ / 0-)
    Recommended by:

    Didn't work for the Dems in 2010, why would the Dems think it will work two years later after the President has had nearly a full term in office?

    "let's talk about that"

    by VClib on Wed Jun 13, 2012 at 10:16:46 AM PDT

    •  Because "it's Bush's fault" is not the narrative (0+ / 0-)

      here. The narrative is that tax cuts make our deficits worse and prevent us from getting out of this recession. That matters going forward.

      •  Joe - there is an easy answer to that (1+ / 0-)
        Recommended by:
        New Rule

        all the Dems have to do is sit on their hands through the end of the year and almost like magic all the tax cuts will be gone and the US will be on a sounder financial footing. The Dems don't need to be bi-partisan, reach across the aisle, find 60 votes in the Senate, schedule hearings, or demand votes in either chamber. They just have to do NOTHING! Why do I fear that the Dems can screw up even that?

        "let's talk about that"

        by VClib on Wed Jun 13, 2012 at 01:08:09 PM PDT

        [ Parent ]

        •  Yes, but we're losing the ideologically battle. (0+ / 0-)

          Polling suggests that voters see a correlation between the deficit and recession. They also blame Obama for the national debt. That's just the result of poor messaging on our part.

          Both of those things need to be unravelled. The debt does not prevent us from enacting fiscal stimulus, which would increase employment. Similarly, Obama is not responsible for the buildup in debt, declining revenues are.  

  •  Slogan for Dems: (0+ / 0-)

    "America:  Don't Double Down on Dumbya!
    -- Obama-Biden 2012 "

    "..The political class cannot solve the problems it created. " - Jay Rosen

    by New Rule on Wed Jun 13, 2012 at 01:31:23 PM PDT

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