Taking Responsibiity for the Deficit
April 9, 2013 Leave a comment
This blog continues yesterday’s post on the federal deficit. Republicans were strangely silent about the doubling of the federal deficit under Ronald Reagan and the doubling of it again under George W. Bush. Now they are demanding that action be taken.
Ever since President Obama was elected in 2008 the Republican cry has been that we must bring down the deficit. Spending is “out of control,” they say, and it must be reigned in. America is facing a debt crisis and it will soon reach a tipping point. If nothing is done the country will face economic ruin and capitalism, as we know it, will collapse.
The hypocrisy of these charges is amazing.
A Brief History of Deficit Spending
There was no outcry from Republican ranks in the years of “out of control spending” during Ronald Reagan’s presidency. Yet during his two terms in office the cumulative federal debt doubled. The additional debt accumulated during his 8 years in office was actually more than the combined total under all the presidents before him going back to the American Revolution.
Republicans still laud Reagan’s fiscal accomplishments. They don’t seem at all concerned about the path of deficit spending that he embarked on.
As Steve McGourty notes in his excellent analysis of the history of U.S. debt, when George Bush Sr. succeeded Ronald Reagan he went on to increase the debt by an average of 11.8% annually. In his final year in office, however, he worked across the aisle with Democrats to raise taxes and reduce the steady increase in the national debt. He was rewarded by his Party by being thrown aside in the next election despite his popularity in having just won the Gulf War.
When President Bill Clinton came to office he attacked the deficit spending problem head on. Working with a Democratic majority in Congress during his first two years, he set the course for change. By the end of his second term in office – despite blistering opposition from the right – he had managed to secure 3 consecutive years of modest budget surpluses.
When George W. Bush took office early in 2001, it was estimated that under existing conditions there would be a further $5.6 trillion surplus over the next 10 years. He quickly instituted a $1.35 trillion tax cut, arguing that unspent government funds should be returned to the taxpayers rather than be used to pay down the accumulated deficit. He passed another tax cut in 2003.
The 8 years of Bush’s presidency were also marked by the largest increases in government spending in U.S. history. Defense spending increased by 107%; domestic spending by 62%; spending on Medicare by 131%; social security by 51%; and income security by 130%. The U.S. was soon experiencing annual budget deficits that dwarfed those of the Reagan and Bush Sr. administrations. By George W. Bush’s final year in office the national debt had mushroomed to $11.3 trillion – more than a 100% increase over the debt level in 2000.
The Republican Party chooses to see itself as the party of fiscal responsibility. Yet, as Steve McGourty notes in his analysis of the data, since 1946 Democratic presidents have increased the national debt by an average of only 3.2% per year while Republicans have increased it an average 9.2% per year. The bottom line: Republican Presidents out borrowed and outspent Democratic presidents by a three to one ratio.
Bruce Bartlett, who was an official in the administrations of Ronald Reagan and George H.W. Bush, has said rather critically of his colleagues,
The human capacity for self-delusion never ceases to amaze me, so it shouldn’t surprise me that so many Republicans seem to genuinely believe that they are the party of fiscal responsibility. Perhaps at one time they were, but those days are long gone.
Long gone indeed. As McGourty notes, “At no time since 1945 when Republicans have been in total charge of both elected branches of government have they ever reduced spending. They talk about it a lot, but they never deliver.” He concludes,
The facts also show that it most often takes a Democratic President to control and reduce spending. The truth is that the Republicans [under George W. Bush] are now the party of “borrow and spend”. They hate taxes, but love to spend; their solution is to put off paying till later for our security today. They prefer to see our children pay for their debt. Neo-Conservative thinking has run up over a 9.5 trillion dollar debt [by 2008] that will not be paid off for a generation or more, and [it] is still increasing at an astounding rate with no end to deficit spending in sight.
President Obama inherited this massive debt and has worked hard to stabilize government spending during his time in the White House. He inherited a budgetary deficit of $1.4 trillion in his first year of office, along with the Bush tax revenue scheme that saw government revenues completely inadequate to meet required expenditures. [During Bush’s years government expenditures increasing by 65% while revenues increased by only 35%.]
By the end of Obama’s first 4 years in office, the annual deficit had been cut in half. It continues to decline. He has done more to cut spending in his first term than any other American President. Simply put, it is a myth that Obama promotes “out of control” spending.
It is time to set the record straight.