The Real Drivers of the Deficit in a Simple Graph

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.”