How the USA Headed Down the Road to Massive Debt

With the Tea Party element of the GOP ranting for budget cuts and the Christianist elements of the GOP clamoring for the gutting of social programs and cultural programs that benefit causes that the theocrats denounce, it is important to remember how the USA came to find itself in the current budget deficit debacle. Why? Because, unless the principal underlying causes of the deficit disaster are corrected, only a fool - or a liar - can expect to craft a real meaningful solution. So what are the causes? The short form answer: George Bush and the GOP. That's right. The same folks who want to give further tax cuts to the extremely wealthy even as they gut the programs that provide a minimum social safety net to the poor, disadvantaged and elderly. The longer answer is a mix of tax cuts and ballooning spending - but not in the areas targeted by the GOP. The Washington Post (with Bloomberg) has an article that looks at the truth of how this nation when from budget surplus to smothering debt. (The photo above via the Post shows the always truth challenged Eric Cantor from Virginia). Here are some highlights:
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The nation’s unnerving descent into debt began a decade ago with a choice, not a crisis. In January 2001, with the budget balanced and clear sailing ahead, the Congressional Budget Office forecast ever-larger annual surpluses indefinitely. The outlook was so rosy, the CBO said, that Washington would have enough money by the end of the decade to pay off everything it owed.
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Voices of caution were swept aside in the rush to take advantage of the apparent bounty. [GOP]Political leaders chose to cut taxes, jack up spending and, for the first time in U.S. history, wage two wars solely with borrowed funds. “In the end, the floodgates opened,” said former senator Pete Domenici (R-N.M.), who chaired the Senate Budget Committee when the first tax-cut bill hit Capitol Hill in early 2001.
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Now, instead of tending a nest egg of more than $2 trillion, the federal government expects to owe more than $10 trillion to outside investors by the end of this year.
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The biggest culprit, by far, has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. Together, the economy and the tax bills enacted under former president George W. Bush, and to a lesser extent by President Obama, wiped out $6.3 trillion in anticipated revenue. That’s nearly half of the $12.7 trillion swing from projected surpluses to real debt. Federal tax collections now stand at their lowest level as a percentage of the economy in 60 years.
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Big-ticket spending initiated by the Bush administration accounts for 12 percent of the shift. . . . Obama’s 2009 economic stimulus, a favorite target of Republicans who blame Democrats for the mounting debt, has added $719 billion — 6 percent of the total shift, . . . Bush-era policies, meanwhile, account for more than $7 trillion and are a major contributor to the trillion-dollar annual budget deficits that are dominating the political debate.
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As soon as he took office, Bush pushed Congress to make good on his tax pledge. . . . . A chorus of skeptics warned against spending the surplus. Some stressed the inherent uncertainty of the CBO projections. Others said a big tax cut would unleash pent-up desire in both parties to pursue expensive priorities without the pay-as-you-go restraints that had helped produce the surplus.
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Congress approved a $1.35 trillion tax cut in record time. A second package, worth $350 billion, followed in 2003. Together, they constituted one of the largest tax cuts since World War II, according to the conservative Tax Foundation.
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In the end, Bush cut taxes and spent more money. Good times masked the impact, as surging tax revenues reduced the size of year-to-year deficits during the first three years of his second term. But after the economy collapsed during Bush’s final year in office, deficits — and therefore the debt — began to explode as Obama sought to revive economic activity with more tax cuts and federal spending.
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Yes, entitlements are a spending problem. But anyone who isn't a lair needs to confess that Chimperator Bush and his GOP cohorts in their tax cuts for the wealthy and unfunded wars bear most of the blame for the current debacle. Therefore, why would anyone in their right mind now trust the GOP to fix the problem?