Despite Republican claims otherwise, a new analysis released today by the Center on Budget and Policy Priorities shows that Bush-era policies are what caused our economic downturn and huge deficit.
The Source of the Deficit Mess
Steve Benen, Washington Monthly:
Republican lawmakers and far-right activists have suddenly discovered, after eight years of dramatic fiscal irresponsibility, that they care deeply about deficit reduction again. Worse, they're absolutely convinced that President Obama and those free-spending Democrats are responsible, putting a terrible burden on future generations.
The Center on Budget and Policy Priorities released a report today, analyzing the existing deficit in detail, and what factors created it. Here's hoping Republicans and Teabaggers are paying attention. [...]
This isn't just about pointing fingers for self-satisfaction or partisan vanity. It's important for the public to realize who's responsible, in large part because it's important for the public to weigh policymakers' credibility. If GOP lawmakers embraced policies that are almost entirely responsible for the deficit those same lawmakers are now complaining about, it's a relevant detail.
And on a related note, for those who believe deficit reduction must be a top national priority -- a group that's apparently pretty large -- it's important to recognize which party's proposals are effective in improving, or not, the fiscal landscape.
President Obama will deserve plenty of blame over the course of his presidency, but holding him responsible for getting us into this budgetary mess doesn't make sense.
President Obama Largely Inherited Today’s Huge Deficits
Economic Downturn, Financial Rescues, and Bush-Era Policies Drive the Numbers
Center on Budget and Policy Priorities:
Special Series: Economic Recovery WatchSome critics charge that the new policies pursued by President Obama and the 111th Congress generated the huge federal budget deficits that the nation now faces. In fact, the tax cuts enacted under President George W. Bush, the wars in Afghanistan and Iraq, and the economic downturn together explain virtually the entire deficit over the next ten years (see Figure 1).
The deficit for fiscal 2009 was $1.4 trillion and, at an estimated 10 percent of Gross Domestic Product (GDP), was the largest deficit relative to the size of the economy since the end of World War II. Under current policies, deficits will likely exceed $1 trillion in 2010 and 2011 and remain near that figure thereafter.
The events and policies that have pushed deficits to astronomical levels in the near term, however, were largely outside the new Administration’s control. 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 began 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.
While President Obama inherited a bad fiscal legacy, that does not diminish his responsibility to propose policies to address our fiscal imbalance and put the weight of his office behind them. Although policymakers should not tighten fiscal policy in the near term while the economy remains fragile, they and the nation at large must come to grips with the nation’s deficit problem. But we should all recognize how we got where we are today.
Analysis Behind and Beyond Government Economic Reporting
See the charts at Shadow Government Statistics:
Inflation, Money Supply, GDP, Unemployment and the Dollar