Home Budget, Economy The Real Drivers of the Deficit in a Simple Graph

The Real Drivers of the Deficit in a Simple Graph

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I saw this graph on Daily Kos a few minutes ago and thought it was well worth passing on to Blue Virginia readers. Also, check out the Center on Budget and Policy Priorities paper on this subject. It clearly concludes who and what is at fault for America’s long-term, structural deficit problem.

If not for the tax cuts enacted during the presidency of George W. Bush that Congress did not pay for, the cost of the wars in Iraq and Afghanistan that were initiated during that period, and the effects of the worst economic slump since the Great Depression (including the cost of steps necessary to combat it), we would not be facing these huge deficits in the near term.

See the graph and note: the Bush tax cuts are BY FAR the largest drivers of deficits through 2019. After that, it’s the economic downturn, aka the “Bush Great Recession.” Then, it’s the unpaid-for wars in Iraq and Afghanistan. Then, trailing far, far behind, are the recovery measures undertaken by the Obama administration, including TARP/Fannie/Freddie bailouts (which actually appear to be breaking even).

In addition, I’d also add rising health care costs to this list. Clearly, those need to be dealt with, preferably through a number of measures that make Americans healthier and stop subsidizing unhealthy behavior (e.g., subsidies for corn syrup, sugar, fast food, junk food, sprawl, etc.), reduce the costs of drugs, and other measures that reduce perverse incentives in the health care system.

But first, we need to start with the “low-hanging fruit” and “no-brainers”: 1) end the Bush tax cuts; 2) fund the wars and/or end them; and 3) invest in America’s infrastructure to help turn the economy around as fast as possible and put it on a solid footing for decades to come. Right now, Republicans have no plan to do any of that. In fact, Paul Ryan’s plan will make almost all of those things worse. I’m not sure the Democrats have a plan either. Why not? Whatever the reason(s), there’s no excuse anymore: it’s time to stop screwing around and come up with a serious, sustainable plan for this country’s long-term fiscal and economic health. That goes for everyone in Congress — Democrats, Republicans, Tea Partiers, independents, whatever.

P.S. Note that none of the items listed above include “non-defense discretionary” spending, which was what Teapublicans have been so obsessed with cutting, despite the fact that it makes up a miniscule part of the budget, and NOT the part that’s driving the deficits. In other words, it’s all about their wacky ideology, NOT about cutting “the spending” or reining in the deficit. That’s all just a smokescreen for their real objective: “drown government in the bathtub.”

  • pontoon

    Am not making light of this chart, but the first thing I thought when I saw this post was Paul Ryan on Meet the Press this morning with his charts.  

    Charts are great if they illustrate the truth, and it seems this one from Daily Kos does.  I just read an editorial in the NY Times,

    http://www.nytimes.com/2011/04

    which clearly places blame for the current mess on both sides which is where it belongs.

    My question is how do we get our elected officials to be honest, forthcoming about our economic situation.  Republicans have shown their hand…they want to screw the middle class, children, and seniors while making the Bush tax cuts permanent and then still give more tax breaks to the wealthy.  The Tea Party is furious that Boehner and Cantor “gave in” for only $38 billion in cuts on Friday instead of shutting down the government to get the $61 billion they wanted.

    So where does that leave us?  The Teahadists are not going to compromise.  They would rather destroy our country, than compromise.  What a truly sad state we face with the rigid, ideological folks that were elected in 2010.  Can Democrats and moderate Republicans (if there is such an animal anymore) reach a compromise and have enough votes to pass it without the Teadhists?

  • frisbee

    in addition to the National Teach-in On Austerity, Debt, and Corporate Greed this past Wednesday at the Louisa Public Library.

    As Oscar Robinson once said about the late Wilt Chamberlain, “the numbers don’t lie.” Unfortunately politicians of both stripes do, and neither party is going to acknowledge the magnitude of what needs to be done.

    The Replicants in particular are just getting warmed up in showing the American people just how mean spirited they are when it comes to pursuing their ideological goals

    It’s going to be very long slog to 2012 before we can even hope to replace them. And that’s assuming that enough people recognize that their actions were largely responsible for wrecking the economy, all for short term for political gain.

    Speaking of short term thinkers, Eric Cantor was at his I really deserve to be Speaker best today…

    http://crooksandliars.com/karo

    http://thinkprogress.org/2011/…