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The biggest
drivers of the current and near
term US budget deficits
are the unfunded wars, unfunded tax cuts especially for the wealthiest, bailouts for the banks, and the economic downturn.
Tax cuts and subsidies
for the wealthy are good for giving
much more discretionary wealth to the wealthiest, and
not much else. And their use of the money is for
the most part self-indulgent and predatory.
Discretionary wars are
excellent sources of profiteering, and the price for them falls heaviest on the broader public, who pay in money, misery, and blood.
Bailouts are windfalls
for the powerful and well-connected.
The US financial system as it
is constituted today is mostly
predatory rather than productive. Gordon Gekko
has many incarnations with
high public profiles today. And they
are shameless to the point of reckless
arrogance.
The efficient market theory
and trickle down economics
are what the Brits like to call 'bollocks.' If you wish to take
from the weak and the poor and the elderly and and give it
to those who have the most already, just say it,
proudly.
But don't try to fool yourselves, in addition to
everyone else. Whatsoever you sow, that you
will also reap.
Downturn and Legacy
of Bush Policies Drive Large Current
Deficits
Economic Recovery Measures, Financial Rescues
Have Only Temporary
Impact
By Kathy Ruffing and James R. Horney
October 10, 2012
Some lawmakers, pundits, and others continue to
say that President George W. Bush’s
policies did not drive
the projected federal deficits of the coming decade — that, instead, it was
the policies of President
Obama and Congress in
2009 and 2010.
But, the fact remains:
the economic downturn, President Bush’s tax cuts and the wars in Afghanistan and Iraq explain
most of the deficit over
the next ten years — according to this update of our analysis, which is based on the Congressional Budget Office’s
most recent ten-year budget projections (from
August) and congressional action since we released
the previous version of this
analysis in May 2011.
The deficit for fiscal year
2009 — which began
more than three months before President Obama’s
inauguration — was $1.4 trillion and, at 10 percent of Gross Domestic
Product (GDP), the largest deficit
relative to the economy since
the end of World War II. At
$1.3 trillion and nearly 9 percent of GDP, the deficits in 2010 and 2011 were only slightly
lower. If current policies remain in place, deficits will likely exceed $1 trillion in 2012 and 2013 before subsiding slightly, and never fall below
$700 billion for the remainder of this decade.
The events and policies that pushed deficits
to these high levels in
the near term were, for the most part, not of
President Obama’s making. If not for the Bush tax
cuts, the deficit-financed
wars in Iraq and Afghanistan, and the effects of the worst recession since the Great Depression (including the cost of policymakers’
actions to combat it), we
would not be facing these huge deficits in the near term. By themselves, in fact, the Bush tax cuts and the wars in Iraq and Afghanistan will
account for almost half of the $18 trillion in debt
that, under current policies, the nation will owe by 2019.[1] The stimulus measures and financial rescues will account for less than 10 percent of the debt at that
time.
President Obama, however,
still has a responsibility
to propose, and put the weight of his office behind, policies that will address our key long-term fiscal
challenge — preventing the significant rise in debt as a percentage of GDP that will occur
under current policies. Allowing the flagship Bush tax cuts — which initially were slated to end after 2010 and were extended for two years — to expire on schedule at the end of 2012 would halt the rise in the debt-to-GDP ratio.
In fact, that step — or an equivalent,
substitute package of deficit reductions
— would reduce the debt-to-GDP ratio and stabilize
it at about 70 percent in
the second half of the decade.
Of course, with the economy
still fragile, it is prudent to continue the middle-class portion of the tax cuts for a while longer. But there is no justification for extending
the entire set of expiring
tax cuts indefinitely. To keep the debt stable over the longer run,
when the fiscal impacts of an aging
population and rising health
care costs will continue
to mount, policymakers will need to take large additional steps on both the expenditure and revenue sides
of the budget...
Read the entire report here or download a PDF here.
Posted byJesse
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