The Common Sense Primer on the Deficit and the Economy – Part 2
(In today’s installment of the “Common Sense” Guide to the Great Deficit Debate & The Future of Our Economy reader Bruce Schmiechen, who has the blog The Titanic Sails at Dawn, focuses on how conservatives created our national deficit as part of an intentional strategy to bankrupt government. Part 1 of the Common Sense Guide is available here, and the complete document can be found at Bruce’s blog, The Titanic Sails at Dawn.)
“STARVE THE BEAST!” – A DELIBERATE STRATEGY TO BANKRUPT GOVERNMENT
The comic posted above illustrates quite well how conservatives have used a fiscal approach over the past thirty years that sought to undermine progressive government by “starving the beast,” i.e. making sure the government does not have enough money to operate. Bruce Bartlett, a conservative economist and Forbes magazine columnist who worked in the Reagan-era Treasury Department, wrote in 2010:
(T)o a large extent our current budgetary problems stem from the widespread adoption of an idea by Republicans in the 1970s called “starve the beast.” It says that the best, perhaps only, way of reducing government spending is by reducing taxes…The impact has been perverse – raising spending and making deficits worse. (Bartlett – Forbes.com, 5.10.10)
The authentically conservative Bartlett’s critique parallels the view of the liberal, Nobel Prize-winning economist, Paul Krugman:
The starve-the-beast doctrine is now firmly within the conservative mainstream. George W. Bush himself seemed to endorse the doctrine as the budget surplus evaporated: in August 2001 he called the disappearing surplus ”incredibly positive news” because it would put Congress in a ”fiscal straitjacket.” (Krugman, New York Times, 9.14.03)
Bruce Bartlett further noted that former half-term governor and Tea Party icon Sarah Palin had recently “begged her followers in Boston to ‘please starve the beast’ by resisting tax increases, no matter how large the budget deficit.”
CURRENT DEBT PROJECTIONS – WHOSE DEFICITS?
According to the Center on Budget and Policy Priorities:
Just two policies dating from the Bush Administration — tax cuts and the wars in Iraq and Afghanistan — accounted for over $500 billion of the deficit in 2009 and will account for almost $7 trillion in deficits in 2009 through 2019, including the associated debt-service costs…Without the economic downturn and the fiscal policies of the previous Administration, the budget would be roughly in balance over the next decade.
Together with the economic downturn, the Bush tax cuts and the wars in Afghanistan and Iraq explain virtually the entire deficit over the next ten years, as shown in this chart:
As the Center on Budget Policies and Priorities has explained,
Including the interest costs, the Bush-era tax cuts account for over $700 billion — or nearly 55 percent — of the deficit projected for 2019 under current policies…
The Center has estimated that not extending the tax cuts — or fully paying for the cost of extending them — would reduce the projected budget shortfall through 2050 by two-fifths.
In short, Republicans have been the source of most of the national debt problems – pandering to the public with tax cuts while apparently believing that, in the words of former Vice-President Dick Cheney, “Reagan taught us deficits don’t matter.” This is why it makes it all the more hypocritical for Republicans to now pretend like they care about the deficit.
(Part 3 of the Common Sense Primer – focusing on how the rich have benefited from the conservative economic policies that created the deficit – will be posted on Monday, March 28)
Tags: budget, common sense primer, deficit, fiscal responsibility, President Reagan, Republicans, Schmiechen, taxes
