I found an interesting article, courtesy of The Baseline Scenario, that counters the right-wing populist assertion that the soaring national deficit is all because of Obama’s out-of-control spending. The Center for Budget and Policy Priorities, which is obviously not a conservative think tank, nonetheless produces substantive, well-researched reports. I am posting a portion of a report from their website so that the next time someone who drinks the Koolade offered by the Beck/Palin/Limbaugh crowd explains why we are in such dire circumstances you can counter intelligently. For the full report, please click on the link. You can download an Adobe Acrobat file of the full report by clicking the icon under the title of the report, if you are interested.
President Obama Largely Inherited Today’s Huge Deficits
Economic Downturn, Financial Rescues, and Bush-Era Policies Drive the Numbers
By Kathy Ruffing and James R. Horney
December 16, 2009
Some 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.