(If you don't want to read all this, just look at the attached graph.)
Ok, you won't see this anywhere else because journalists are unwilling to do basic information gathering these days. They just quote a bunch of politicans and "experts" and call it a day. I wouldn't ordinarily post it somewhere like this, but some of the topics have already been touched on.
The attached graph shows US Government receipts (taxes) and spending from 1994 to 2007. 2008 to 2017 is from the President's budget proposal.
Sources are the US Treasury website and White House website.
Links:
Office of Management and Budget
Back Issues: Combined Statement of Receipts, Outlays, and Balances of the United States Government (Combined Statement): Publications & Guidance: Financial Management Service
The pink line graphs the outlays as if the Department of Defense budget just increased at inflation starting with Clinton's last budget. Bascially assuming no build up after 9/11 and no war build up. To show the relative effect of the wars.
Note these things:
- Clinton reduced capital gains tax rates in 1997. Everyone knows what happened with the stock market. The budget surplus was due to capital gains taxes from the dot com boom. The bust hit in 2000 and affected 2000 and 2001 tax receipts. Graph NASDAQ for this period if you doubt this.
- Clinton also changed the capital gains exemption for homes from a one time $125k after age 55, to $500k every 2 years. Have any news media brought this up as a factor in the housing boom? Um, no.
- 9/11 tanked the economy and tax receipts in the 2002-2003 period.
- Bush tax cuts were in mid 2003. (Everyone's rate was reduced.) Note receipts went up after the cuts, not down as many people imply. By 2007, total receipts were 26% higher than Clinton's last year. Somehow people want you to believe that no tax cut or an increase would have led to budget surpluses.
- Note that had Clinton's last year's Defense budget been grown at inflation, (ridiculus assumption post 9/11) there would have been a tiny surplus only in 2006. Entitlement spending increases swamped the increase in tax receipts.
- Bush's deficit was really due to other spending, not Defense. Non-defense spending went from $1.5 trillion in 2000 to $2.2 trillion in 2007. Very little of that is controllable by any President. Almost half of the total outlays are Medicare, Social Security, and unemployment and disability payments. Interest accounts for another 9%.
Now to the current President:
- He's said he's bringing back an era of responsibility.
- After the "targeted, timely, and temporary" stimulus, you'd therefore expect a reduction in spending.
- Instead by the last year in his first term, after dipping slightly for 3 years, spending is right back to the "inherited" spending level.
- Note the stabilized deficit level in Obama's budget is permanently higher than the Bush years. Around $600 billion. Obama and Congress tacked $787 billion onto Bush's last fiscal year so it would set a Bush reference point in the stratosphere. Coincidentally, the just passed regular funding for the rest of this fiscal year contains almost 9,000 earmarks on top of this. (US Government years are October 1 to September 30.)
- The President's forecast is using 3.4% GDP growth in 2010 and 5.2% in 2011, so the assumption is the recession is over by then. Therefore no need for huge outlays to continue.
My read: indiscriminate, drawn-out, and permanent.
President's sleight of hand
