Monday, May 09, 2011

hmmm

I don't often comment on economic stuff on this blog, but this one got me to thinking...

These days Americans get constant lectures about the need to reduce the budget deficit. That focus in itself represents distorted priorities, since our immediate concern should be job creation. But suppose we restrict ourselves to talking about the deficit, and ask: What happened to the budget surplus the federal government had in 2000?

The answer is, three main things. First, there were the Bush tax cuts, which added roughly $2 trillion to the national debt over the last decade. Second, there were the wars in Iraq and Afghanistan, which added an additional $1.1 trillion or so. And third was the Great Recession, which led both to a collapse in revenue and to a sharp rise in spending on unemployment insurance and other safety-net programs.

So who was responsible for these budget busters? It wasn’t the man in the street.

President George W. Bush cut taxes in the service of his party’s ideology, not in response to a groundswell of popular demand — and the bulk of the cuts went to a small, affluent minority.

Similarly, Mr. Bush chose to invade Iraq because that was something he and his advisers wanted to do, not because Americans were clamoring for war against a regime that had nothing to do with 9/11. In fact, it took a highly deceptive sales campaign to get Americans to support the invasion, and even so, voters were never as solidly behind the war as America’s political and pundit elite.

Finally, the Great Recession was brought on by a runaway financial sector, empowered by reckless deregulation. And who was responsible for that deregulation? Powerful people in Washington with close ties to the financial industry, that’s who. Let me give a particular shout-out to Alan Greenspan, who played a crucial role both in financial deregulation and in the passage of the Bush tax cuts — and who is now, of course, among those hectoring us about the deficit.

<idle musing>
3.1 trillion dollars! I can't fathom that kind of money, can you? And 2/3 of that for war! I guess that's another reason to be a pacifist...
</idle musing>

7 comments:

Kirk Lowery said...

Krugman understates the amount spent on wars. He neglects the weapons development costs, all the troops we station abroad (e.g., in Europe. Why?!). But he also ignores the increase of the federal deficit with the stimulus bill and ObamaCare. Krugman is also, in my opinion, wrong about deregulation being the cause of the Great Recession. (Disclaimer: I'm a libertarian by politics.)

Just a knee-jerk reaction. :-)

Kirk

John Cook said...

Okay, I'll bite. This article is so typical of left-leaning journalism: don't bother addressing the issue, just side step it and assign blame.

You will find very few conservatives or libertarians praising Bush's spending policies, but the following comparison puts it in right perspective: If Bush raised the deficit so terribly (and he did!), why is Obama engaged in nothing but accelerating us in the direction? See here: http://blog.heritage.org/2009/03/24/bush-deficit-vs-obama-deficit-in-pictures/

Find me an progressive/liberal who is willing to actually wrestle with the problem that Obama is continuing to contribute to rather than just attempting to turn our attention with pointless finger pointing at past policies that cannot be undone.

jps said...

Kirk,

I can't be a libertarian because of the fallenness of humanity. There needs to be something/someone restraining that.

John,

Your response is so typical of right-leaning reactions :)

You say that I'm a progressive/liberal—not sure if I am by the definition you applied, but be that as it may. I don't approve of the Obama deficit increases. I would probably choose to cut in different areas than you, but I have been concerned about the increase in the deficit ever since Reagan began the military build-up back in the 1980s. At that time I was afraid we were mortgaging our kids' future. Now, I'm sure we're mortgaging by great-grandkids' future.

As I've said before, governments only get bigger until they become so top-heavy that the least little hiccup causes them to fall. Look at the 12th century BCE; look at the late western Roman Empire. Next in line, the US...

James

Kirk Lowery said...

Jim,

Libertarianism isn't about absolute freedom. It's about liberty (not freedom) that is the maximum possible consonant with the liberty of others.

I have no objection to one of the roles of government being the restraint of evil.

But as we see in our current government, government officials have no restraint on them. Quis custodiet ipsos custodes?

Kirk

jps said...

Kirk,

Yes, but most forms of libertarianism that I have run across want to minimize government even there. It is interesting how different libertarianism is here in Indiana from what it was in Minnesota. In Minnesota, I could almost identify myself as a libertarian. Not so in Indiana; here it is all about getting rid of government.

And I definitely agree Quis custodiet ipsos custodes? As I mentioned to John, governments have historically grown to the point of collapse. Theoretically, a representative democracy is supposed to be a check on government. As we have seen of late, though, government is in the pocket of deep-pocketed special interests.

James

John Cook said...

James,

I need to clarify that I did not call you any names; I would not stoop to that. I characterized the article as left-leaning and I asked an honest question: whether one might be able to find a progressive/liberal who is adequately critical of the policies of the president of their own choosing. There were plenty of conservatives peeved at Bush, but at least in the media I find very little actually criticism of Obama from Obama's side of the aisle. Should that not be disturbing?

jps said...

John,

Sorry if it came across as accusatory. I didn't take it as name calling. And, yes; I do find it disturbing that the same people who accused the Bush administration of being militaristic and imperialistic haven't said a word about the same policies being carried on by the Obama administration. I find it intellectually dishonest to endorse identical policies just because "our team" is now in charge.

By the way, I would tend to label myself as progressive—but I don't define it as having the government being the nanny. As I said before, I would make huge cuts to the federal budget, just as you would. But, I think our differing philosophies would have us making those cuts in different locations—and, of course, mine are the right ones :)

James