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This updated analysis examines the sources of projected deficits from 2009-2019 – a period that spans the beginning of the Obama Administration and extends past the economy’s anticipated recovery — to show the lasting harm done by policies that President Obama inherited. It should provide much-needed and relevant context to the coming budget debates
“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 virtually the entire deficit over the next ten years.”
The complementary chart, below, shows that the Bush-era tax cuts and the Iraq and Afghanistan wars — including their associated interest costs — account for almost half of the projected public debt in 2019 (measured as a share of the economy) if we continue current policies.
It's based on data from the Congressional Budget Office and the Center on Budget and Policy Priorities. Its significance is not partisan (who's "to blame" for the deficit) but intellectual. It demonstrates the utter incoherence of being very concerned about a structural federal deficit but ruling out of consideration the policy that was largest single contributor to that deficit, namely the Bush-era tax cuts.
An additional significance of the chart: it identifies policy changes, the things over which Congress and Administration have some control, as opposed to largely external shocks -- like the repercussions of the 9/11 attacks or the deep worldwide recession following the 2008 financial crisis. Those external events make a big difference in the deficit, and they are the major reason why deficits have increased faster in absolute terms during Obama's first two years than during the last two under Bush. (In a recession, tax revenues plunge, and government spending goes up - partly because of automatic programs like unemployment insurance, and partly in a deliberate attempt to keep the recession from getting worse.)
To understand the looming deficits, The New York Times analyzed Congressional Budget Office projections of the budget surplus or deficit for the years 2009-12, President Obama’s current term. The budget office has been making estimates for these years for nearly a decade now. The numbers that appear below are the average annual deficit or surplus for this four-year period.
Nobody gives a damn about the debt.
Now, as for the real truth, Greenspan revised gutted Section 20 of the act in order to allow holding companies to invest TWICE as much as previously allowed, in essence making Glass-Steagall obsolete. That's in Byron Dorgan's book "Reckless", and Byron should know because he stood as a lone voice against the repeal of the act in 1999. And in fact, Weill made a call to Clinton the subject of which was a compromise on the Community Reinvestment Act which Phil Gramm was actually trying to gut.
The House version differed in two important ways:
1) It took regulatory authority from the Federal Reserve and gave it to the Secretary of the Treasury.
2) It refused to extend to insurance companies obligations under the Community Re-investment Act to provide information about their patterns of mortgage lending.
It was the Community Reinvestment Act provision in particular that threatened to derail the conference committee. The Community Reinvestment Act required regulated banks and thrifts to offer loans and banking services throughout their service areas, including lower-income communities. But here is the wrinkle - the CRA essentially served to protect low and moderate income communities from predatory lending, such as subprime mortgages. If anyone has doubts about Sandy Weill's connections between GLB and the subprime market, just a year after the passage of the bill repealing Glass-Steagall, Citigroup had become the number one subprime lender in the country. Its vehicle for this was the newly formed CitiFinancial.
While Phil Gramm and Sandy Weill played an important and pretty dirty role in repeal of the act, the repeal became possible because financial industry was united in this desire and at the moment did not have substantial opposition. On the contrary, "Main street" (aka big business) was neutral, if not supportive and Congress was split along the party lines all Republican voted for the repeal). Also the means to bypass Glass-Steagal already were invented and widely used. Here is one insightful comment which shows the complex history of the act repeal: (read source for rest of text)
Originally posted by neo96
Funny how entitlement spending for the last decade is not mentioned in those graphics really is amazing at the crap being peddled on ATS.
What is the biggest spending in this country?
SS,Medicare,Medicaid that is not even mentioned.
That is over $2.2 trillion of current federal spending.
Blackmarketeer would you agree with the following?
Bush economic policies he implimented during his time in office act like a mulitplier, negatively effecting potential positive growth opportunities and reinforcing the potential for further debt.
A fellow member presented a really good analogy in a similar thread.
"The outside of a piece of meat can look delicious, but within lays the possibility of a rotten core"
I have worded the quote up a bit, but it has the same point. The surface statistics can be skewed all they way to give the illusion of a prosperious country, but underneth the foundations are rotten and weakening.
How does the congressional budget office track these types of things when the Obama administration is so reluctant to PASS a budget?
Originally posted by EvilSadamClone
Nobody gives a damn about the debt.