GOP Rides a Tall Stack of $20s

I just threw up in my mouth.

Right wingers often trigger my gag reflex. But I was hoping to get a longer reprieve than usual at the start of this last of the double-zero years. Alas. This time, my stomach's been churned from listening to Republicans warn about the dire dangers of deficit-spending if President Barack Obama obtains approval for his economic stimulus package.

Where were those clarion warning voices during the eight years Mister Bush and his cronies were adding $5 trillion to the national debt, $1 trillion of it a direct consequence of tax cuts for the rich?

I won't make you Google for the answer. They were in the same place they and their predecessors were when Ronald Reagan more than doubled the national debt during his eight years in office. Reagan talked a good game. His performance was something else. Just like today's nauseating Republicans.  A large stimulus bill is "a horrible mistake," South Carolina Governor Mark Sanford said Sunday on CNN’s "Late Edition," with "dire consequences" for the dollar, inflation and the national debt. Now that we're in the midst of what could very well the worst economic downward spiral in 75 years, deficit spending is suddenly horrible.

Ronald Reagan arrived at the White House in 1981 with three major agenda items on his platter. Two of these were just like Mister Bush's 20 years later: greatly increase defense spending and slash taxes on the wealthy.  He did both. But his greatest effort was devoted to cutting the top tax rate from 70% to 50% to 38% to 28%, giving already wealthy Americans gigantic new piles to play with. Thus did he start us down the road toward a Third World ratio between rich and poor.

Reagan achieved this defense boost and plutocratic tax reduction by borrowing more than all the presidents who had preceded him. That generated a bit of contradiction with the third item supposedly on his agenda: ending the annual budget deficit. At the time of his first inauguration, this hovered around $80 billion a year. The accumulation of past deficits - the national debt - was nearly a trillion dollars. That gave Reagan's speechwriters the focus for a powerful image for him to use in his first address to Congress in February 1981. He said:

I've been trying ... to think of a way to illustrate how big a trillion is.  The best that I could come up with is that if you had a stack of $1000 bills in your hand only four inches high you would be a millionaire. A trillion dollars would be a stack of $1000-dollar bills 67 miles high.

Like so many other things Reagan said, this wasn't true. A trillion-dollar stack of $1000 bills would measure just over 63 miles high. Since the last one was printed in 1945 and use of all large denomination bills was discontinued by the Treasury in 1969, most Americans have never seen a $1000 bill. What we're most familiar with are the $20 bills ATMs spit out. Reagan's image-makers missed the mark. A trillion-dollar stack of twenties would be an impressive 3150 miles high.

The national debt nearly tripled on Reagan's watch, from $993 billion to $2.6 trillion, a stack of Andrew Jacksons soaring 8450 miles high. But Reagan was frugal. When George W. Bush wandered into the White House January 20, 2001, the national debt had climbed to $5.7 trillion. When he leaves two weeks from today, it will be pushing $10.8 trillion, a stack of twenties 34,000 miles high.

What did we get for that extra $5 trillion added to the national debt while Mister Bush smirked his way around the Oval Office? As Linda Bilmes and Joseph Stiglitz write in The $10 Trillion Hangover in Harper's:

The worst legacy of the past eight years is that despite colossal government spending, most Americans are worse off than they were in 2001. This is because the money was squandered in Iraq and given as a tax windfall to America's richest individuals and corporations, rather than spent on such projects as education, infrastructure and energy independence, which would have made us all better off in the long term.

President Bush did manage, by way of deficit spending, to grow the economy by 20 percent during his tenure. But who benefited from that growth? Between 2002 and 2006, the wealthiest 10 percent of households saw more than 95 percent of the gains in income. And even within those rarefied strata, the gains tended to be concentrated at the very top. According to one study, the nation's 15,000 richest families doubled their annual income, from $15 million to $30 million. And in that same period, corporate profits shot up 68 percent - more than five times the growth seen in the overall economy.

Even as the wealthiest families have increased their holdings, the families at the center of the income spectrum saw their incomes shrink by 1 percent. In 2000, the average weekly earnings of production and non-supervisory workers (70% of the workforce) amounted to $527 (in current dollars). Six years later, their wages have risen a mere $11, and those same workers have meanwhile seen their net worth (assets minus liabilities) wither as a result of falling home values, higher personal debt, and shrinking savings, factors now being exacerbated by the collapsing stock market.

To be fair, inflation must be figured in to give a more accurate calculation. That $1 trillion debt in 1981 translates into $2.25 trillion in today's dollars. The $5.7 trillion debt when Bill Clinton left the presidency in 2001 translates into $6.7 trillion today.

So that $10.8 trillion that Cheney-Bush are leaving us with is not double what it was in 2001. Merely a 62% increase. In eight years. In fact, using inflation-adjusted dollars, in the past 28 years, the national debt has risen $800 billion during Democratic administrations, and a whopping $7.5 trillion during Republican administrations. Or, looked at another way, it's risen $100 billion a year during Democratic presidencies and $375 billion during Republican administrations. In the Cheney-Bush administration, it has averaged $500 billion a year.

The Republicans' gigantic transfer of current and future wealth makes it very tough indeed for the new administration to argue in favor of the level of stimulus we really need. That would be something on the order of a trillion dollars for education, infrastructure, unemployment insurance, jump-starting green manufacturing, and patching the battered safety net in the states.

Over the next month or so, Mark Sanford and his ilk in and out of Congress can be counted on to challenge and reduce the economic stimulus proposal, a proposal that already isn't bold enough. They won't remind anybody about who got us into this mess. Nor will they point out how an unconscionable transfer of wealth - plus waste and outright corruption - will, once again, mean those who can afford it least are going to get shafted most. That ought to make us all throw up in our mouths.