Wednesday, February 06, 2008

Republicans Sure Ain’t Conservative With Federal Checkbook

George W. Bush revealed his final budget on Monday and it sure proves that Mr. Bush is a real fiscal conservative. W’s budget, if adopted by the Congress would add over four hundred billion dollars to the Federal Government’s debt. However, in his uncanny ability to talk doubletalk, Mr. W wants us to believe that this is a conservative budget. He also expects us to believe his incredible prediction that the federal budget will actually have a surplus by 2012.

All the pundits tell us that Mr. Bush’s legacy will be the war in Iraq. This maven, however, thinks the war will be second on Bush's disaster list. W's number one disaster will be that by the time he leaves office he will have added more than three and a half TRILLION dollars to our national debt. Dear reader, as of close of business yesterday, our beloved government owes about nine trillion, two hundred billion dollars to its creditors around the world. And Mr. Bush proposes to add another half trillion by the time he leaves office.

George W. Bush is obviously NOT a fiscal conservative. And for those of you who think his policies are a break with previous presidents of his party, you better think again. Let’s look at a few facts. First a few caveats. This information I took from the Treasury Department is on a fiscal year basis. Therefore, the debt each year is as of September 30, which is obviously not the date that a president takes office. Further, looking at debt figures over a period of more than twenty-five years we really should make adjustments for inflation. If you, loyal reader, wish to do those inflations adjustments go right ahead. I‘m too lazy. Oh, I rounded to the nearest million.

Ronald Reagan..........Debt in 1981......$997,855,000,000

George H. W. Bush...Debt in 1989.. $2,857,430,000,000

Bill Clinton................Debt in 1993... $4,411,448,000,000

George W. Bush.......Debt in 2001... $5,807,463,000,000

Debt as of 9/30/07........................... $9,007,653,000,000

Looking at this chart, keep in mind that the starting debt figure for a new president is the ending figure for his predecessor. Therefore, the presidents added approximately this amount to our national debt:

Reagan.... $1,859 billion in eight years
Bush I..... $1,554 billion in four years
Clinton.... $1,396 billion in eight years
Bush II.... $3,200 billion in six years

So, how did the conservative Republican Party produce so many presidents who can’t balance the federal checkbook? Remember what George Herbert Walker Bush called “Voodoo Economics” when he ran against Ronald Reagan for the Republican nomination in 1980? Reagan’s economic theory, which has been followed by the two Republican presidents after him, is that if you reduce the federal tax rate the economy will expand so much that there will actually be an increase in revenue to the government. The more than six and a half trillion dollars that the three Republicans presidents have added to our national debt since 1981 clearly demonstrates that Papa Bush was right in calling this Voodoo Economics. Unfortunately, our grandchildren will still be paying off this Republican fiasco in thirty or forty years.


Cargosquid said...

Its not so much as a lack of revenue as an addiction to spending. And remember, the part of the spending that can't be touch is growing exponentially. And then BUSH added the prescription drug plan. The only objections I heard were from conservatives.

That's why I'm not a republican, but an independent conservative.

If the democrats would get their act together on defense and capitalism, then I would vote that way.


Andrew said...

I'm not that happy with Bush's budget, but your post is unfair on two counts:

First, "fiscal conservatism" is not the equivalent of being for balanced budgets. It has much more to do with being opposed to using the government as a means of redistributing wealth. There is nothing intrinsically wrong with deficits--in fact, running some defect makes sense because our children will be much richer than we are. When the straw man of "fiscal conservatism" is replaced with a more realistic one, Bush's budget appears more positive, because it has reduced entitlements and domestic discretionary spending (which is good, at least from a fiscally conservative perspective):

Second, the economic theory that says that tax cuts can _sometimes_ pay for themselves is nearly undisputed by economists, and is also supported by evidence. Watch this video on the Laffer Curve:

The big caveat: the theory predicts that tax cuts will pay for themselves only _sometimes_ (when we are on the downward sloping side of the Laffer Curve). The data indicates that when Regan cut the highest tax bracket from ~85% to ~35%, revenues actually did rise. Sometimes, however, we are on the upward sloping side of the curve, and in these cases, although there is some revenue feedback, the increased revenue is not enough to make up for the reduced rate. It is a disgrace that this lesson that tax cuts have an effect on people's behavior--intuitively true and supported by theory and data--is not taken into account by the Congressional Budget office when they predict the "cost" of tax cuts.