Eleven Things The GOP Doesn’t Want You To Know About The DeficitPosted: November 19, 2012
The Deficit Has Grown Mostly Because Of The Recession
The deficit has ballooned not because of specific spending measures, but because of the recession. The deficit more than doubled between 2008 and 2009, as the economy was in free fall, since laid-off workers paid less in taxes and needed more benefits. The deficit then shrank in 2010 and 2011.
The Stimulus Cost Much Less Than Bush’s Wars, Tax Cuts
Republicans frequently have blamed the $787 billion stimulus for the national debt, but, when all government spending is taken into account, the stimulus frankly wasn’t that big. In contrast, the US will have spent nearly $4 trillion on wars in the Middle East by the time those conflicts end, according to a recent report by Brown University. The Bush tax cuts have cost nearly $1.3 trillion over 10 years.
The Deficit Grew Under George W. Bush
When George W. Bush took office,the federal government was running a surplus of $86 billion. When he left, that had turned into a $642 billion deficit.
The Deficit Is Shrinking
Last year’s federal budget deficit was 12 percent lower than in 2009, according to the Office of Management and Budget. The deficit is projected to shrink even more over the next several years.
Investors Are Paying Us To Borrow Money
The interest rate on 10-year Treasury bonds is negative, according to the Treasury Department. Investors are even paying us for 30-year Treasury bonds, when adjusted for inflation.
Investors Are Not Running Away
Conservative commentators have been warning for years that investors will run away from Treasury bonds because of the national debt. So far it’s not happening. Interest rates on Treasury bonds continue to hover at historic lows.
Health Care Reform Reduces The Deficit
Republicans have blasted the Affordable Care Act as “budget-busting.” But health care reform actually reduces the deficit, according to the Congressional Budget Office.
The US Is Borrowing Less From China
The US government is borrowing much less from foreign countries than before the recession, according to government data cited by Paul Krugman. That is because the US private sector is financing our bigger deficits.
We Spend A Lot On Defense
Defense spending constituted 20 percent of federal spending last year, or $718 billion, according to the Center on Budget and Policy Priorities. This adds up to 41 percent of the world’s defense spending, according to Bloomberg TV anchor Adam Johnson. Mitt Romney vowed to not cut defense spending if elected president.
We Spend A Lot On Health Care
Health insurance, including Medicare and Medicaid, constituted 21 percent of federal spending last year. In contrast, education constituted 2 percent of federal spending. Meanwhile, Mitt Romney and Paul Ryan promised not to change Medicare for Americans age 55 and older.
Republicans May Want Large Deficits For Now
The federal budget deficit ballooned under Ronald Reagan, and that may be just the way Republicans like it. Some Republican thinkers have proposed “starving the beast”: that is, cutting taxes in order to use larger deficits to justify spending cuts later. Since Republicans ultimately want lower taxes and a smaller government, what better way is there to cut spending than to make it look urgent and necessary?