The Fiscal Legacy of George W. Bush

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June 12, 2012, 6:00 am
The Fiscal Legacy of George W. Bush
By BRUCE BARTLETT
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Republicans assert that Barack Obama assumed sole responsibility for the budget on Jan. 20, 2009. From that date, all increases in the debt or deficit are his responsibility and no one else’s, they say.

This is, of course, nonsense – and the American people know it. As I documented in a previous post, even today 43 percent of them hold George W. Bush responsible for the current budget deficit versus only 14 percent who blame Mr. Obama.

The American people are right; Mr. Bush is more responsible, as a new report from the Congressional Budget Office documents.

In January 2001, the office projected that the federal government would run a total budget surplus of $3.5 trillion through 2008 if policy was unchanged and the economy continued according to forecast. In fact, there was a deficit of $5.5 trillion.

The projected surplus was primarily the result of two factors. First was a big tax increase in 1993 that every Republican in Congress voted against, saying that it would tank the economy. This belief was wrong. The economy boomed in 1994, growing 4.1 percent that year and strongly throughout the Clinton administration.

The second major contributor to budget surpluses that emerged in 1998 was tough budget controls that were part of the 1990 and 1993 budget deals. The main one was a requirement that spending could not be increased or taxes cut unless offset by spending cuts or tax increases. This was known as Paygo, for pay as you go.

During the 2000 campaign, Mr. Bush warned that budget surpluses were dangerous because Congress might spend them, even though Paygo rules prevented this from happening. His Feb. 28, 2001, budget message reiterated this point and asserted that future surpluses were likely to be even larger than projected due principally to anticipated strong revenue growth.

This was the primary justification for a big tax cut. Subsequently, as it became clear that the economy was slowing – a recession began in March 2001 – that became a further justification.

The 2001 tax cut did nothing to stimulate the economy, yet Republicans pushed for additional tax cuts in 2002, 2003, 2004, 2006 and 2008. The economy continued to languish even as the Treasury hemorrhaged revenue, which fell to 17.5 percent of the gross domestic product in 2008 from 20.6 percent in 2000. Republicans abolished Paygo in 2002, and spending rose to 20.7 percent of G.D.P. in 2008 from 18.2 percent in 2001.

According to the C.B.O., by the end of the Bush administration, legislated tax cuts reduced revenues and increased the national debt by $1.6 trillion. Slower-than-expected growth further reduced revenues by $1.4 trillion.

However, the Bush tax cuts continued through 2010, well into the Obama administration. These reduced revenues by another $369 billion, adding that much to the debt. Legislated tax cuts enacted by President Obama and Democrats in Congress reduced revenues by an additional $407 billion in 2009 and 2010. Slower growth reduced revenues by a further $1.3 trillion. Contrary to Republican assertions, there were no additional revenues from legislated tax increases.

In late 2010, Mr. Obama agreed to extend all the Bush tax cuts for another two years. In 2011, this reduced revenues by $105 billion.

On the spending side, legislated increases during the Bush administration added $2.4 trillion to deficits and the debt through 2008. This includes $121 billion for Medicare Part D, a new entitlement program enacted by Republicans in 2003.

Economic factors added almost nothing to increased spending – just $27 billion in total. This is mainly because interest rates were much lower than C.B.O. had anticipated, leading to lower spending for interest on the debt.

After 2008, it becomes harder to separate spending that was initiated under Mr. Bush from that under Mr. Obama. We do know that spending for Part D has risen rapidly – Republicans phased in the program to disguise its budgetary cost – adding $150 billion to the debt during 2009-11.

According to a recent report from the Center for Strategic and International Studies, the unfunded wars in Iraq and Afghanistan increased the debt by $795 billion through the end of fiscal 2008. The continuation of these wars by Mr. Obama added another $488 billion through the end of 2011.

Putting all the numbers in the C.B.O. report together, we see that continuation of tax and budget policies and economic conditions in place at the end of the Clinton administration would have led to a cumulative budget surplus of $5.6 trillion through 2011 – enough to pay off the $5.6 trillion national debt at the end of 2000.

Tax cuts and slower-than-expected growth reduced revenues by $6.1 trillion and spending was $5.6 trillion higher, a turnaround of $11.7 trillion. Of this total, the C.B.O. attributes 72 percent to legislated tax cuts and spending increases, 27 percent to economic and technical factors. Of the latter, 56 percent occurred from 2009 to 2011.

Republicans would have us believe that somehow we could have avoided the recession and balanced the budget since 2009 if only they had been in charge. This would be a neat trick considering that the recession began in December 2007, according to the National Bureau of Economic Research.

They would also have us believe that all of the increase in debt resulted solely from higher spending, nothing from lower revenues caused by tax cuts. And they continually imply that one of the least popular spending increases of recent years, the Troubled Asset Relief Program, was an Obama administration program, when in fact it was a Bush administration initiative proposed by the Treasury Department that was signed into law by Mr. Bush on Oct. 3, 2008.

Lastly, Republicans continue to insist that tax cuts are highly stimulative, often saying that they add nothing to the debt, when this is obviously ridiculous.

Conversely, they are adamant that tax increases must not be part of any deficit-reduction package because they never reduce deficits and instead are spent. This is also ridiculous, as the experience of the Clinton administration clearly shows. The new C.B.O. data confirm these facts.

http://economix.blogs.nytimes.com/2012/06/12/the-fiscal-legacy-of-george-w-bush/
Fucking lefty bloggers...:icon_cool

Bruce Bartlett held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul. He is the author of “The Benefit and the Burden: Tax Reform – Why We Need It and What It Will Take.”
 

ShooterMcGavin

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May 25, 2005
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#2
I'd love to see one written up about Barry Hope&Dream
 

Motor Head

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#3
Sure he got the bill for George W. Bush's steak dinner.....but he got the bill, ordered lobster and a very expensive bottle of Cristal Champagne and decided to tip the wait staff a 500% tip, with the taxpayers AMEX. He had two years of house and senate control and what did he do.......SPEND MORE FUCKING MONEY THEN CAN BE PRINTED!!!!!

He went crazy liberal wanting to spend the surplus on social program bullshit. The only problem there was no surplus, and he flat out didn't give a shit.
 

Don the Radio Guy

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#4






It's been 4 years. Enough of this shit. Not even the "American people" are giving Obama a pass, despite what this article claims.
 

f kane

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#5
"The 2001 tax cut did nothing to stimulate the economy"

Obama's almost trillion in stimulus did nothing to stimulate the economy, and they know it which is why they have nothing to to say but it's the other guys fault.

And I'll gladly take the 2002 through 2007 economy over what's now any day of the week.
 

Don the Radio Guy

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Lastly, Republicans continue to insist that tax cuts are highly stimulative, often saying that they add nothing to the debt, when this is obviously ridiculous.
Fuck this guy. The ONLY thing that adds to debt is spending money. If I make $50,000 a year and spend $60,000, that's a $10,000 deficit. I can't say "well I expected a raise of $10,000" and balance the books. How hard is that for these idiots to understand?
 

CousinDave

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#7
It was pretty good until the events of January 3, 2007 took place and quickly got out of control
 

mascan42

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#9
Fuck this guy. The ONLY thing that adds to debt is spending money. If I make $50,000 a year and spend $60,000, that's a $10,000 deficit. I can't say "well I expected a raise of $10,000" and balance the books. How hard is that for these idiots to understand?
You mean it doesn't add to debt if you willingly take a pay cut? Which is basically what a tax cut is to the government.
 

Don the Radio Guy

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You mean it doesn't add to debt if you willingly take a pay cut? Which is basically what a tax cut is to the government.
You don't ever have the money from a pay cut in your possession. You can't count money that you don't have. You're running off the flawed premise that this money belongs to the government from the start. It doesn't.
 

Norm Stansfield

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#14
Lastly, Republicans continue to insist that tax cuts are highly stimulative, often saying that they add nothing to the debt, when this is obviously ridiculous.
Fuck this guy. The ONLY thing that adds to debt is spending money.
Yes, that is poorly written, this guy is an idiot. The problem with the Bush admin isn't that they cut (explicit) taxes, it's that they at the same time increased spending.

You are absolutely right, only spending adds to the debt. However, spending is a tax on the general population of the country: whether it is paid back by future taxes or inflation (inflation is a tax on everyone holding the currency being inflated). It's even worse if it's never paid back, because it affects everyone's ability to gain access to capital (to borrow), not to mention the need to pay interest on the debt.

So, when a government spends more than the previous government did (as the Bush administration spent more than the Clinton administration did), they are contributing to the debt, and implicitly to higher taxes. A "tax cut" without the spending cut to go with it will not stimulate the economy. Saying that it will is just as much Keynesianism as saying that spending more will stimulate the economy.

Now if only the retards pointing these things out about the Bush admin would realize how much worse the Obama admin is, at doing the same exact thing.
 

Norm Stansfield

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P.S. The only possible motivation for willingly creating a deficit is that "it would prevent future administrations from spending as much". As you may have noticed, that didn't work either.

If Bush wanted the federal government to spend less, overall, he should've tried to cut entitlement programs. That wouldn't have prevented the Stimulus, but it would've reduced the general budget for at least a decade by whatever he managed to cut.
 

Norm Stansfield

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#16
You mean it doesn't add to debt if you willingly take a pay cut? Which is basically what a tax cut is to the government.
No, it doesn't. Why would taking a paycut add to my debt? (unless you are assuming that I'm a big enough moron to spend money I don't have - which I'm not, so please don't assume it).

Oh, and a tax cut is nothing like willingly taking a pay cut. It's like a thief deciding to steal a little less, so that the guy he's robbing doesn't notice. It makes a little more sense than willingly taking a pay cut.
 

MayrMeninoCrash

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#17
Since everyone here hates to see Bush take all the blame and thinks the slate was wiped clean on Jan 21, 2009, how would you feel about this.

Let's say President X enacts a law saying that all men 65 and older will automatically receive a check for $1M starting in 2020 (after President X is termed out of office). For whatever reason, Congress fails to rescind this law and it goes into effect as planned. President Y is currently the sitting president and is faced with paying out billions of dollars of Federal money to old guys every year. Does President Y take all the blame for the huge deficit created on January 1, 2020?
 

Don the Radio Guy

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#18
At least you acknowledge Bush is to blame finally.
lrn2read

I've been asking for a date in which you guys won't blame Bush anymore for something like 2 years. I never get a date.


Since everyone here hates to see Bush take all the blame and thinks the slate was wiped clean on Jan 21, 2009, how would you feel about this.
It's been almost 4 fucking years. At what point will your side admit that you're at fault?

Don't bother answering. We all know the answer is "never". The fact that the president himself does the same thing is pathetic, shameful and beneath the office.
 

BIV

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#20
Since everyone here hates to see Bush take all the blame and thinks the slate was wiped clean on Jan 21, 2009, how would you feel about this.

Let's say President X enacts a law saying that all men 65 and older will automatically receive a check for $1M starting in 2020 (after President X is termed out of office). For whatever reason, Congress fails to rescind this law and it goes into effect as planned. President Y is currently the sitting president and is faced with paying out billions of dollars of Federal money to old guys every year. Does President Y take all the blame for the huge deficit created on January 1, 2020?
This is a stupid "what if."

Lets call it what it is. The point of tax cuts is twofold.

1. To keep more money in circulation, promoting job growth and spending.
2. To limit government spending.

When faced with a lack of tax funds, you don't cry about the previous guy giving more money back to the people. You do the right thing and cut spending. And as long as you don't cut from basic infrastructure and military, you cut as much as you have to to stay in the black.

Make no mistake, W Bush sucked at this. But, compared to Obama, Bush was a saint. Barry's spending has been an abortion of epic proportions.
 

Norm Stansfield

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#22
Since everyone here hates to see Bush take all the blame and thinks the slate was wiped clean on Jan 21, 2009, how would you feel about this.

Let's say President X enacts a law saying that all men 65 and older will automatically receive a check for $1M starting in 2020 (after President X is termed out of office). For whatever reason, Congress fails to rescind this law and it goes into effect as planned. President Y is currently the sitting president and is faced with paying out billions of dollars of Federal money to old guys every year. Does President Y take all the blame for the huge deficit created on January 1, 2020?
[edit]
I did some more thinking on this: the responsibility for balancing the current budget, and never spending more than the revenue that's coming in (except in an emergency situation, like a World War), always lies with the current government. It is their responsibility to adjust legislation in a way that keeps the government they are running solvent.

If Congress in 2020, and President Y, allow the government they are running to just give away all that money and bankrupt the federal government, they are the ones who should be rounded up and executed after the inevitable revolution, not President X.

President X is a scumbag too, but he has an excuse: he couldn't have known for sure, in 2010, that the government won't have enough money to give all those billions away in 2020.
 

BIV

I'm Biv Dick Black, the Over Poster.
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#23
Right after the guy who replaced him killed 24 million Jews.

What a stupid fucking argument.
Now, Don, stop thinking with your brain and think with your emotions instead. Otherwise you will never come to a logical conclusion.

Since everyone here hates to see Bush take all the blame and thinks the slate was wiped clean on Jan 21, 2009, how would you feel about this.
The slate was not wiped clean, but that's irrelevant. What's important is every fiscal decision he's made since taking office has not only done nothing to improve the situation, it's made things much, much worse.

Even when accounting for inflation, more than twice the spending of any other president in history. And that's not just compared to four years of Bush, that's all eight years of Bush, including 9-11, Katrina, Iraq and Afghanistan, compared to Barry's four years. He's a fucking embarrassment.
 

Neon

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#24
Yes, politicians often blame their predecessors, but politicians don't often preempt THEMSELVES from blaming their predecessors. Luckily, Obama is an exception:

[video=youtube;CCN5-ovvFL0]http://www.youtube.com/watch?v=CCN5-ovvFL0[/video]
 

NuttyJim

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#25
At what point do you stop blaming and start accepting responsibility?