Running in the red: How the U.S., on the road to surplus, detoured to massive debt

[dtotire]

Running in the red: How the U.S., on the road to surplus, detoured to massive debt


http://www.washingtonpost.com/business/economy/running-in-the-red-how-the-us-on-the-road-to-surplus-detoured-to-massive-debt/2011/04/28/AFFU7rNF_story.html?hpid=z1




By Lori Montgomery, Published: April 30

The nation’s unnerving descent into debt began a decade ago with a choice, not a crisis.

In January 2001, with the budget balanced and clear sailing ahead, the Congressional Budget Office forecast ever-larger annual surpluses indefinitely. The outlook was so rosy, the CBO said, that Washington would have enough money by the end of the decade to pay off everything it owed.


Voices of caution were swept aside in the rush to take advantage of the apparent bounty. Political leaders chose to cut taxes, jack up spending and, for the first time in U.S. history, wage two wars solely with borrowed funds. “In the end, the floodgates opened,” said former senator Pete Domenici (R-N.M.), who chaired the Senate Budget Committee when the first tax-cut bill hit Capitol Hill in early 2001.

Now, instead of tending a nest egg of more than $2 trillion, the federal government expects to owe more than $10 trillion to outside investors by the end of this year. The national debt is larger, as a percentage of the economy, than at any time in U.S. history except for the period shortly after World War II.

Polls show that a large majority of Americans blame wasteful or unnecessary federal programs for the nation’s budget problems. But routine increases in defense and domestic spending account for only about 15 percent of the financial deterioration, according to a new analysis of CBO data.


more at link.

[liberal N proud]

1. And these assholes are very proud of their accomplishment

Brining the government to its knees in 10 short years.

Tax Cuts, Outrageous spending and two wars which were paid for with borrowed money. Where are the criminals who allowed this? They belong in jail with Bernie Madoff.

[classysassy]

7. The criminals are in Texas and Virginia

living the good life without fear of going to jail,justice once again blind and evil.

[dtotire]

2. Another Article On Same Subject

Among GOP, anti-tax orthodoxy runs deep

link:
http://www.washingtonpost.com/business/economy/among-gop-an-ironclad-anti-tax-orthodoxy/2011/06/02/AG90SgJH_story.html?hpid=z1

[shraby]

4. As deep as Grover Norquist..who had all the repubs sign

an oath not to raise taxes. Who is he that he can require an oath from congresscritters? Their first oath is to the constitution and the well being of the nation. Norquist wants to bring it all down.

[enough]

3. Main point:

snip>
snip from the article>

The biggest culprit, by far, has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. Together, the economy and the tax bills enacted under former president George W. Bush, and to a lesser extent by President Obama, wiped out $6.3 trillion in anticipated revenue. That’s nearly half of the $12.7 trillion swing from projected surpluses to real debt. Federal tax collections now stand at their lowest level as a percentage of the economy in 60 years.

Big-ticket spending initiated by the Bush administration accounts for 12 percent of the shift. The Iraq and Afghanistan wars have added $1.3 trillion in new borrowing. A new prescription drug benefit for Medicare recipients contributed another $272 billion. The Troubled Assets Relief Program bank bailout, which infuriated voters and led to the defeat of several legislators in 2010, added just $16 billion — and TARP may eventually cost nothing as financial institutions repay the Treasury.

Obama’s 2009 economic stimulus, a favorite target of Republicans who blame Democrats for the mounting debt, has added $719 billion — 6 percent of the total shift, according to the new analysis of CBO data by the nonprofit Pew Fiscal Analysis Initiative. All told, Obama-era choices account for about $1.7 trillion in new debt, according to a separate Washington Post analysis of CBO data over the past decade. Bush-era policies, meanwhile, account for more than $7 trillion and are a major contributor to the trillion-dollar annual budget deficits that are dominating the political debate.

snip>

[ladjf]

5. Very good post. Should be read by everyone. nt

[bhikkhu]

6. In 2000, a raft of politicians ran on how they would spend the surplus

By the time they were sworn in, the dot-com bubble has burst and there was no surplus, but they spent it anyway. Simple enough.

In a slight parallel, Obama campaigned on an ambitious social agenda, in a fairly decent (seemingly) economy. By the time he took office, the global economy was well into collapse mode, and 5 million US jobs had evaporated. His administration walked into smoking wreckage Bush left, and the first year was spent trying to put foundations back under the economy, rather than what he had intended.

Thats the way it goes sometimes.

[bemildred]

8. And they knew what they were doing.

Just as they know right now that they want the economy to stay in the tank and the people to keep suffering and unemployment to stay high and economic security to be non-existent (except for themselves).