Tuesday, July 12, 2011
The Washington Post speaks:From their editorial: entitlement reform — including reform that contemplates benefit cuts — is the truly progressive position Here's the thing. A lot of the debt that people are freaking out about was the result of the Iraq war, which was not paid for with increased taxes at the time. So why isn't that being discussed? Why aren't those responsible being held to account? (Bush and Republicans in Congress, along with cheerleading by the Post). The failure to recognize that the debt didn't "just happen" but was the result of policy choices, and the insistence that only now can the fiscal problem be solved by cutting services for those lowest on the totem pole, is bizarre.
posted by Quiddity at 7/12/2011 03:54:00 PM
13 comments
Regardless of applicability, "Bush Did It" has long exceeded its political shelf life.
No, Anon, "Bush Did It" still has political legs. This post is a reminder that Bush/Cheney (and Rummy makes three) said that the costs of the Iraq war would not add to the deficits after using up the Clinton surplus with the first set of tax cuts for the wealthy, because Iraq oil revenues would cover such costs. When it was revealed that the oil revenues would not do so, Cheney said deficits don't matter. So jump ahead to the 2008 Bush/Cheney Great Recession that they dumped on Obama. Now, those who supported Bush/Cheney lemming-like (et tu, Anon?) complain about deficits they initiated and say they can solve the problem.
No, Shag, "Bush Did It" does not have political legs. "Bush Did It" is the subject of derision by conservatives and increasingly the subject of derision by independents. There's already a response for "Bush Did It." The response is "Obama Made It Worse", and that messaging is far worse for liberals than "Bush Did It." It completely trumps "Bush Did It" because Bush is not running for election while Obama is. "Bush Did It" does not harm the Republican candidate, because that candidate will not be George Bush. "Obama made it worse" does harm Barack Obama. So if you want that to be the theme of the next election -- "Bush Did It" vs "Obama Made It Worse", then by all means keep flogging the "Bush Did It" dead horse and telling yourself it has political legs. It does ... for the Republicans.
Just saying.
Just seems like the same ol' song and dance routine by conservatives. They simply won't rest until poor people are as poor as they possibly can be, rich people are as rich as they possibly can be while maintaining a state of unending military action. It's George Orwell's world, we just live in it.
if we had to pay for our wars nobody would want them.
btw, if you add up the defense budgets from 2001-2010 they are around six trillion higher than the 2000 defense budget x 10.
But as we know the statute of limitations on blaming Bush and the party he led for this spending has come & gone.
Tax cuts were, what, $4T over these ten years.
But, again, the Bush tax cuts were not bad policy since they happened 10 years ago.
Forget that the last time the Democrats raised taxes to balance the budget the electorate voted them out the next year. The Dems should have raised taxes by letting the Bush cuts expire anyway in 2009-2010 when they had the opportunity.
Cutting taxes is easy, raising them is impossible these days. WASF.
^ oops $3T above, not $6T.
And you'll notice how no one in the administration even noticed what happened when Bush had his everyone-gets-a-$300-check tax refund. It didn't increase consumer spending -- it increased consumer debt reduction. People used the checks to pay their bills. Obama is doing the same thing with the payroll tax holiday, and shockingly, people are doing the exact same thing. Reducing debt instead of increasing spending.
Right now people want, psychologically, to dig out of their debt, mostly their underwater mortgage and student loans. If the Dems had focused on economic programs to help people reduce these big, intractable debts -- they would have been working in alignment with what people were trying to do anyway, and might have put themselves in a better political situation now. The best they did was HAMP, which helped people to keep their underwater mortgage, which was good because it kept people in their home, but bad because the underlying problem is still there -- people can't sell their house and move to places where the jobs are, and they are still wage-slaves to their student loans.
The entire financial and political landscape is different now than 2000-2008, so why say "Bush did it"? Why not "Clinton did it"? or "Reagan did it?" Heck, go back far enough and Roosevelt did it. But none of those will win you an election.
The entire financial and political landscape is different now than 2000-2008, so why say "Bush did it"? Why not "Clinton did it"? or "Reagan did it?"
Well, actually, I'd put the responsibility in order roughly like this:
1. Alan Greenspan
2. Ronald Reagan
3. Milton Friedman
Somewhere not too far down the list are Clinton and Rubin. ... oh, yeah, Phil Gramm too.
If the Dems had focused on economic programs to help people reduce these big, intractable debts...
Because the debts are indeed so intractable, and because outright debt forgiveness will never be on the table, probably the least bad option is a dose of inflation.
>Obama is doing the same thing with the payroll tax holiday, and shockingly, people are doing the exact same thing. Reducing debt instead of increasing spending.
The payroll tax cut is the only stimulus Obama could get from the House, so he took it.
Our problems aren't going to be solved with a temporary 2% tax cut, no.
>The entire financial and political landscape is different now than 2000-2008, so why say "Bush did it"? Why not "Clinton did it"?
To be honest, a lot of what got rolling in the Clinton years came to full fruition or was "doubled down" on under Bush.
This is most clearly seen in the following graph:
http://research.stlouisfed.org/fred2/series/CMDEBT
The difference between Clinton and Bush though is that Clinton was holding the Republican Congress' leash wrt blowing up the deficit, especially via military spending.
Zooming in on 1990-2010: and adding interest rates:
http://research.stlouisfed.org/fred2/graph/?g=17h
we can see that while the latter part of Clinton's term saw debt growing at a dangerous rate, the Fed was attempting to throttle the economy back.
Of course, doing this in an election year was doing no favors for Gore, but hey, the Fed's gotta do what it's gotta do.
Once the election was decided by Justice Kennedy, Greenspan dropped rates from 7% to 1%, the Republicans deregulated the mortgage system, cut taxes twice, and household debt went from $8T to $14T in just 5 years, largely thanks to the housing bubble.
It was one helluva party, and of course Greenspan held rates low right through most of 2004, keeping the party going through the election.
Another graph:
http://research.stlouisfed.org/fred2/graph/?g=17i
shows that annual debt take-on exceeded $1.2T per year during the peak of the bubble (2006).
The Republicans were riding a tiger they could not get off of at this point. The economy had become entirely dependent on the housing bubble and this stealth stimulus of $100B/month. Combined with corporate debt take-on:
http://research.stlouisfed.org/fred2/graph/?g=17j
the total debt stimulus was $2T/yr at the peak of the credit cycle.
The reason the current mess is Bush's fault is because he's the one who got us into 2 unnecessary wars, raised defense spending $3T, irresponsibly cut taxes $4T, and allowed the financial system to blow up on his watch.
Utter, complete failure. Lest we forget, Clinton actually left the national debt lower than he found it (45% of GDP to 35%), largely to the Democrat's self-sacrificing 1993 tax rise (and Bush Sr's self-sacrificing agreement on an earlier tax rise).
Clinton failed, however, to bring trade deficits under control, get single payer healthcare off the ground, or move the country off of our dependence on imported oil.
But back in the 1990s globalism seemed like a good idea, nobody wanted HillaryCare, and there was a global oil glut so oil was cheap cheap cheap.
Peak oil has done it, with bipartisan loathsome and unaware politicians and policy makers (Greenspan, et al) passing off current perfidy -and mounting debt- as okay because we'll grow our way out of it. Growth's over, a new economy will emerge, but first the chaos.
Peak oil isn't the problem. We still have the ability to extract a lot more oil than we are extracting right now. We just have to authorize exploration and drilling in places where we don't want to authorize exploration and drilling. So we pay the price of import dependency.
We're also extracting a hell of a lot of natural gas. That can be chemically converted into gasoline, as can coal. There are at least those two technologies waiting in the pipeline should oil become scarce enough to drive up the price to levels where chemical conversion of natural gas and coal become profitable.
Energy is not the source of this economic depression.
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