Some facts about our national debt and annual deficits.
1) In January 2001, the Congressional Budget Office (CBO) having realized a budgeted surplus in 2000 and was forecasting surpluses into the future, figured by 2010, we would be able to pay off all U.S debt. Only missed it by $13-$14 Trillion.
2) Instead of reaping the rewards of budget surpluses, we embarked on two wars, cut taxes, and increased spending all on borrowed funds.
3) Instead of sitting on a $2Trillion rainy day fund we now owe $10Trillion to outside investors and the size of our debt as a percentage of gross domestic product is the highest it’s ever been since just after WWII.
So what were the biggest contributors to this massive reversal of fortune?
1) Loss of tax revenue. Between Bush tax cuts, Obama’s tax cuts, and lower receipts due to two recessions, the Treasury lost out on $6.3Trillion of anticipated revenue. Nearly half of the reversal. Federal tax revenues as a percentage of GDP are at a 60 year low. The next time that a Republican tells you we don’t have a revenue problem, hit them with the $6.3Trillion number.
2) Iraq and Afghanistan wars contributed $1.2Trillion to the reversal or about 10%.
3) Bush’s Medicare Prescription drug plan cost $272Billion or 2%.
4) President Obama’s Economic Reinvestment and Recovery act added $719Billion or 6%.
All told Obama can be held accountable for $1.7Trillion while his predecessor George W. Bush can be held accountable for $7Trillion. Guess what, the real problems haven’t hit us just yet: Medicare and Social Security will become excessive drags on government coffers as our population ages.
So what we have are spend and borrow Republicans and tax and spend Liberals for the last thirty years, yes Reagan spent, borrowed, and eventually taxed; which is why the only real solution is to cut spending, raise taxes, and continue to borrow in until a balanced budget is achieved years from now.
I repeat: raise income taxes to Clinton levels while you figure out how to reform the tax code, cut spending to 2004 levels, increase payroll taxes, lower corporate tax rates and eliminate loopholes, eliminate all gas, oil, and farm subsidies, and reform Medicare services. Yes I said reform Medicare services otherwise our finances are untenable.