A Few Facts on the Deficit

[one...two...tree 2,762]

— By Nick Baumann

The big Friday news dump this week is the Obama administration's projection that the federal budget deficit will reach a record $1.47 trillion this fiscal year. That is, the government will spend $1.47 trillion more than it takes in this fiscal year. There are a few things you should remember when you read about this:

• The current deficit can be attributed almost entirely to the effects of the economic downturn (reduced tax revenue, increased transfer payments), the Bush tax cuts, and the wars in Iraq and Afghanistan. David Leonhardt and the Center for Budget and Policy Priorities both have good articles and charts on this.
• The $1.47 trillion number is actually slightly better than the White House's February prediction. But the forecast for next year looks worse.
• Despite stimulus spending, which most independent experts believe improved the job picture, there is still massive unemployment in the United States.
• The median duration of unemployment is at its highest in 50 years.
• Liberals and conservatives will be arguing about what all this joblessness means. Derek Thompson explains: "Does it mean we must increase the duration of unemployment benefits to protect this new class of unemployed, or does it mean we need to stop subsidizing joblessness? Does it mean we need to expand federal retraining programs, or does it mean federal retraining programs aren't working? Does it mean we need more stimulus, more state aid, more infrastructure projects, more public works...or does it mean it's time to stop everything, stand back, and let business be business?" (Liberals go for the first option in each pairing.) This argument can be summed up simply as stimulus vs. austerity. Right now, stimulus seems to be fighting a losing battle.
• Conservatives don't have a record of caring about or reducing the budget deficit. They do have a record of caring about and reducing taxes on rich people.
• We spend almost as much on our military as the rest of the world combined. (A lot of the other countries that are spending big bucks are our allies.) If you include non-Pentagon defense-related expenditures, US defense spending in fiscal year 2010 will be somewhere between $880 billion and $1 trillion—even more if you include the interest we're paying on debt from past wars. Even if you strip out all that stuff, we're going to be spending north of $700 billion on the Pentagon and the wars in Iraq and Afghanistan next year.
• Long-term deficits are not the same as single-year deficits, and they have different causes. Our projected long-term deficits are driven almost entirely by the rapidly increasing cost of health care. (We're talking about increases driven by things other than the aging of the population.) If we could hold our health care costs at levels comparable to other countries', our long-term deficits would basically disappear. You can see this for yourself by using the Center for Economic and Policy Research's health care budget deficit calculator.
• Social Security is not the problem.

http://motherjones.c...w-facts-deficit

[DEDixon 39]

the quality of life in the US is at an all time low - it declines year after year. i would have never known it had i not traveled to a number of 3rd world countries, but i know and can see that the US is slow spending its way into being a 3rd world country. it might take 20, 30, 40 years to complete this progression, but it is definitely happening.

your kids will pay dearly.

[Obama 2012 1,714]

— By Nick Baumann

The big Friday news dump this week is the Obama administration's projection that the federal budget deficit will reach a record $1.47 trillion this fiscal year. That is, the government will spend $1.47 trillion more than it takes in this fiscal year. There are a few things you should remember when you read about this:

• The current deficit can be attributed almost entirely to the effects of the economic downturn (reduced tax revenue, increased transfer payments), the Bush tax cuts, and the wars in Iraq and Afghanistan. David Leonhardt and the Center for Budget and Policy Priorities both have good articles and charts on this.
• The $1.47 trillion number is actually slightly better than the White House's February prediction. But the forecast for next year looks worse.
• Despite stimulus spending, which most independent experts believe improved the job picture, there is still massive unemployment in the United States.
• The median duration of unemployment is at its highest in 50 years.
• Liberals and conservatives will be arguing about what all this joblessness means. Derek Thompson explains: "Does it mean we must increase the duration of unemployment benefits to protect this new class of unemployed, or does it mean we need to stop subsidizing joblessness? Does it mean we need to expand federal retraining programs, or does it mean federal retraining programs aren't working? Does it mean we need more stimulus, more state aid, more infrastructure projects, more public works...or does it mean it's time to stop everything, stand back, and let business be business?" (Liberals go for the first option in each pairing.) This argument can be summed up simply as stimulus vs. austerity. Right now, stimulus seems to be fighting a losing battle.
• Conservatives don't have a record of caring about or reducing the budget deficit. They do have a record of caring about and reducing taxes on rich people.
• We spend almost as much on our military as the rest of the world combined. (A lot of the other countries that are spending big bucks are our allies.) If you include non-Pentagon defense-related expenditures, US defense spending in fiscal year 2010 will be somewhere between $880 billion and $1 trillion—even more if you include the interest we're paying on debt from past wars. Even if you strip out all that stuff, we're going to be spending north of $700 billion on the Pentagon and the wars in Iraq and Afghanistan next year.
• Long-term deficits are not the same as single-year deficits, and they have different causes. Our projected long-term deficits are driven almost entirely by the rapidly increasing cost of health care. (We're talking about increases driven by things other than the aging of the population.) If we could hold our health care costs at levels comparable to other countries', our long-term deficits would basically disappear. You can see this for yourself by using the Center for Economic and Policy Research's health care budget deficit calculator.
• Social Security is not the problem.

http://motherjones.c...w-facts-deficit

Author loses ALL credibility with that first reason. WRONG. Try Again though and thanks for playing.

[mawilson 2,133]

Author loses ALL credibility with that first reason. WRONG. Try Again though and thanks for playing.

Why do you think it's wrong?

[IndigoSkies 168]

Why do you think it's wrong?

Because it's blaming Emperor Bush.

[Obama 2012 1,714]

Why do you think it's wrong?

because despite the rhetoric, the Bush tax cuts led to increased revenues to the Federal Government.

The problem is, is the government kept increasing spending at the same time.

Had we not increased spending out the #######, we would have been sitting pretty and had been paying off some of our debt the last decade....

[SMR 368]

because despite the rhetoric, the Bush tax cuts led to increased revenues to the Federal Government.

The problem is, is the government kept increasing spending at the same time.

Had we not increased spending out the #######, we would have been sitting pretty and had been paying off some of our debt the last decade....

Beyond the specifics, it's intellectually dishonest to blame the deficit on one part of the budget or another. The government spent more than it took in and is thus in debt.

The author tries to convince us that everything else was paid for and certain things caused the deficit. Some percentage of the budget was paid for and the rest caused the deficit. Thus, any government program can be singled out as causing the deficit. I can just as easily say that foodstamps, medicaid, farm subsidies, and foreign aid caused the deficit. It's dishonest finger-pointing that hopes the reader doesn't think about it too deeply.

[mawilson 2,133]

Beyond the specifics, it's intellectually dishonest to blame the deficit on one part of the budget or another. The government spent more than it took in and is thus in debt.

It's even more dishonest to keep some things off-budget to produce fake rosy numbers.

Bush funded the wars through emergency supplementals and not the regular budget process. I believe Obama is doing the same thing.

[Heracles 417]

It's even more dishonest to keep some things off-budget to produce fake rosy numbers.

Bush funded the wars through emergency supplementals and not the regular budget process. I believe Obama is doing the same thing.

Bingo....

Common sense would dictate an across-the-board tax increase of 3 to 5 percent [per war] to pay for it. Instead they used Enron style accounting to hide the trillion dollar costs.

[Heracles 417]

the quality of life in the US is at an all time low - it declines year after year. i would have never known it had i not traveled to a number of 3rd world countries, but i know and can see that the US is slow spending its way into being a 3rd world country. it might take 20, 30, 40 years to complete this progression, but it is definitely happening.

your kids will pay dearly.

Actually, 3rd world countries tend to have policies which favor the top 1% that are wealthy and do nothing for the rest.

The US has been in decline because people like yourself refuse to invest in the country. Furthermore, just in case it has not dawned on you, some of the highest taxing countries in the world also offer the highest Q.O.L and provide the largest range of benefits to their citizens. What they don't do though, is turn a blind eye and allow illegals to access even a $1 worth of service or income, as that is where the well-oiled machine fails.

[Obama 2012 1,714]

Bingo....

Common sense would dictate an across-the-board tax increase of 3 to 5 percent [per war] to pay for it. Instead they used Enron style accounting to hide the trillion dollar costs.

in all reality, we still haven't paid for World War II....

[Heracles 417]

in all reality, we still haven't paid for World War II....

Which is why I think there should be mandatory levy per war. This way the country is forced to really ponder going to war and ask is it really worth the actual cost to them.

[Hilarious Clinton 452]

because despite the rhetoric, the Bush tax cuts led to increased revenues to the Federal Government.

The problem is, is the government kept increasing spending at the same time.

Had we not increased spending out the #######, we would have been sitting pretty and had been paying off some of our debt the last decade....

Tax revenue is rarely the problem, it's the spending.

Like Dave Ramsey says: You can always spend more than you make.

[Mr. Big Dog 10,747]

because despite the rhetoric, the Bush tax cuts led to increased revenues to the Federal Government.

That's not supported by the facts. In 2000, tax revenues were 20% of GDP. In 2005 - after the two rounds of tax cuts - tax revenues were 16.8% of GDP. That's a decrease, not an increase.

[Obama 2012 1,714]

That's not supported by the facts. In 2000, tax revenues were 20% of GDP. In 2005 - after the two rounds of tax cuts - tax revenues were 16.8% of GDP. That's a decrease, not an increase.

Percentage of GDP and actual revenue are two different things.

After all, Democrats want to demonize corporations on actual profits vs. percentage, so why should the government be any different?