A By-The-Numbers Look at Deficits and Debt by Party

According to the Congressional Budget Office, during the dozen years in which the House of Representatives was under Republican Party control, the average budget deficit was roughly $104 billion.  Since the Democrats assumed control following the mid-term elections in 2006, however, that average has skyrocketed to approximately $1.1 trillion.

Now, confronted with reality and fact, I know what the liberal apologists will say: But Jeff, they’ll argue, the low deficit numbers under GOP control count years when Bill Clinton was doing his thing in the White House, while the marked increase during two of the past three years fell during George W. Bush’s tenure in the Oval Office.

And they’d be right.  Instead of reading a calendar, though, they should pick up a copy of the Constitution.  (NOTE: Most liberals will not have a copy handy — I’d suggest they ask the nearest conservative or libertarian.)

In that document, right in the beginning in Article I, they’ll notice that legislation begins in Congress, not in the Oval Office, and that the president of the United States cannot spend money not appropriated by Congress.  In other words, as much as former President Clinton may have tacked to the center following the defeat of his own universal health care plan and the Republican Revolution in 1994, the fiscal discipline shown during those years is a result of a Republican Party leadership which had not yet completely lost its way.  Moreover, as much as former President George W. Bush may have abandoned his free market principles during the second half of his second term, the lack of fiscal discipline shown over the previous three years falls squarely on the shoulders of the Democrats.

Don’t believe me?  Consider some of the CBO and OMB (Office of Management and Budget) back numbers released in a statement yesterday from Texas Republican Congressman Jeb Hensarling, Vice Ranking Member of the House Budget Committee and the man who, during Friday’s meet-and-greet with House Republicans, was repeatedly called “Jim” by the president as he ducked a budget-related question.  Hensarling makes the eminently demonstrative assertion that “the old annual deficits under Republicans have now become the monthly deficits under Democrats.”

[A]ccording to CBO’s September 2009 Monthly Budget Review, July 2009’s deficit was $181 billion. According to CBO’s December 2009 Monthly Budget Review, October 2009’s deficit was $176 billion. Comparatively, according to OMB’s Historical Tables (Table 1.1), Republicans’ last annual deficit was $160.7 billion in FY2007. Even Republicans worst annual deficit – $412.7 billion in FY2004 according to OMB’s Historical Tables (Table 1.1) – pales in comparison to Democratic deficits. According to CBO’s January Monthly Budget Review, in the first three months of FY2010 (October-December 2009) alone, Democrats have run up a deficit of about $390 billion – $22.7 billion shy of the GOP’s worst annual deficit.

Given that pattern, it should come as no surprise that the new budget released yesterday by the Obama administration is increasing the deficit once again, from a record $1.41 trillion last year to a projected $1.56 trillion next year.

Knowing the unpalatable nature of such numbers, the president of course was quick to offer an excuse.  And, as always, his excuse entailed shifting blame onto his predecessor.

He faced a budget deficit of nearly $1.3 trillion when he “walked in the door” at this time last year, the president said.  Therefore, he insisted, the increase to $1.4 trillion really wasn’t as shocking as most would make it sound.

In mathematics class growing up, teachers always emphasized the importance of “showing your work.”  President Obama, with his history of fuzzy math, didn’t do so.  Thankfully, former Clinton official and pundit extraordinaire Dick Morris did show his work yesterday, when in a commentary on his own eponymous Web site he ripped apart the president’s phony numbers:

In 2008, Bush ran a deficit of $485 billion. By the time the fiscal year started on October 1, 2008, it had gone up by another $100 billion due to increased recession-related spending and depressed revenues. So it was $600 billion. That was the real Bush deficit.

But when the fiscal crisis hit, Bush had to pass TARP in the final months of his presidency which cost $700 billion. Under the federal budget rules, a loan and a grant are treated the same. So the $700 billion pushed the deficit — officially — up to $1.3 trillion. But not really. The $700 billion was a short term loan. $500 billion of it has already been repaid.

So what was the real deficit Obama inherited? The $600 billion deficit Bush was running plus the $200 billion of TARP money that probably won’t be repaid (mainly AIG and Fannie Mae and Freddie Mac). That totals $800 billion. That was the real deficit Obama inherited.

Then…he added $300 billion in his stimulus package, bringing the deficit to $1.1 trillion. And falling revenues and other increased welfare spending pushed it up to $1.4 trillion.

So, effectively, Obama came close to doubling the deficit.

Doubling the budget deficit.  Remember, folks, that this is your money we’re talking about.

When Fox News Channel and talk show radio host Glenn Beck wrote his own version of Thomas Paine’s Common Sense, the national debt stood at roughly $11 trillion.  By the time his book was released last year, it was about $1 trillion higher than that, standing at just over $12.1 trillion thanks to the Senate’s February 2009 vote to increase the debt ceiling (which, of course, they just did again).  Regardless of the starting amount–what’s another trillion among friends, right?–to say that the numbers offered by Beck in Common Sense were startling would be understatement of the year.

Our interest payment to service our $11,000,000,000,000 in debt now stands at about $26,000,000,000 ($26 billion). Per month. That’s over $300 billion a year that will be sent (likely overseas) to our creditors instead of being used to upgrade our schools, roads, or national defense. Common sense tells us that is unsustainable—a country that cannot educate or secure its population is a country that will not be around much longer.

One of the tricks that our leaders have successfully played on us is the illusion of numbers. If I asked you to send me a check for $4,000 you’d probably think about what you could buy with that money (an amazing vacation, new furniture, braces for your child, etc.) and then you’d wonder why on earth you’d send it to me. But when our government asks us for $26 billion every month we don’t have the same reaction because it doesn’t feel personal. Well, let’s make it personal. With one monthly $26 billion interest payment we could fully fund the annual budgets of the Centers for Disease Control ($6.1 billion, annual budget), Coast Guard ($8.7 billion), and the Department of the Interior ($11.1 billion).

With our annual $300 billion in interest payments we could fully fund the Departments of Commerce ($8.1 billion), Education ($68 billion), Homeland Security ($42.3 billion), Housing and Urban Development ($52.3 billion), Energy ($23.2 billion), Justice ($25 billion), and Labor ($49.6 billion) for an entire year.

By 2019, annual interest payments on the national debt will balloon to a projected $806 billion! Why? Because, as you might know from your own credit cards, interest compounds quickly. Making only the minimum payments will result in the unpaid interest being added to our outstanding debt. It’s a cycle that’s almost impossible to pull out of and the damage to our country will almost certainly be irreversible. That $806 billion is more than what it cost us last year to fund the entire Department of Defense ($583 billion), Veterans Affairs ($86.6 billion), the Department of Transportation ($68.7 billion), and the State Department ($18.9 billion). . . combined.

Where will all of that money come from? Again, the politicians say “the rich!” or maybe “the greedy corporations!”—but if that’s our plan, then we are set up for dramatic failure. The total 2008 profits of Exxon Mobil ($45.2 billion), General Electric ($17.41 billion), Wal-Mart ($12.7 billion), and IBM ($12.3 billion) totaled $87.61 billion. If we taxed those profits at 100 percent we still wouldn’t even have on-third of the amount needed to pay the annual interest payment—let alone any of the principal!

So what about the wealthy? Look at it this way: if we took all personal income tax revenue from every American taxpayer for the next decade you would still NOT have enough money to pay off the national debt, even if you exclude interest. And, as a side benefit, we’d have zero dollars to fund the actual government over those years.

This is modern-day slavery, but instead of being sold to work in the fields our children will be working hundred-hour weeks at their jobs to pay off the debts we’ve amassed.

I remember reading that passage by the light of a dim LED booklight–the kind you receive for free with the purchase of a Snuggie–next to a snoring three-year-old in a guest room in rural Poland over the summer.  That night, I remember, I didn’t sleep a wink.  I just kept on looking at my sleeping daughter next to me.  She looked so peaceful that night as I laid awake, my ADD-ravaged mind spinning.  She didn’t know the difference.  Even when she was awake, all she wanted to do was go hunting for snails in the garden or make loud doodle-doo! noises at the roosters or laugh hysterically while chasing the family dog, a German Shepherd that understood more Polish than I’ll likely ever know.  My daughter didn’t know any different, that back at home an ocean away a party of ideologues were busy destroying her country for political gain.

The path we’re on is unsustainable.  And to avoid passing the point of no return–if we haven’t done so already–perhaps this president should consider taking a second look at a budget which adds $8.5 trillion to the national debt over the next decade, contains $17 billion in tax hikes at a time when an increased tax burden means disaster for an economy grapping with double-digit unemployment, and brings to an end the very tax cuts, put into place by George W. Bush in 2003, which spawned private sector growth and brought in record tax revenue in the years immediately following.

But he’ll do no such thing.  You know it.  I know it.  He knows it.  And so does Jeb Hensarling, who found himself disappointed that President Obama’s actual commitment to fiscal responsibility nowhere near matched the rhetoric from last week’s State of the Union address or the words contained within the budget released yesterday.  From yesterday’s statement:

In the same document that President Obama tells the nation he’s committed to fiscal responsibility, he unveils trillions in NEW taxes and entitlements. This makes it very hard to take President Obama’s newfound commitment to fiscal responsibility seriously.

Unfortunately, instead of signaling a change in the weather I’m afraid the President’s budget signals that the looming storm clouds of Obamanomics are here to stay. For the duration of the Administration’s 10-year budget, the deficit never falls below $700 billion, and never falls below 3.6 percent of GDP – a level the Administration’s own budget director has called ‘unsustainable.’ Debt held by the public triples over 10 years, and exceeds 60 percent of GDP as a share of the economy this year – surpassing last year’s 50-year high. Debt continues to rise to consume 77.2 percent of our economy by the end of the budget window. Couple this budget with the threatened takeover of our health care system, a threatened energy tax and the threatened makeover of our financial system and it is little wonder that job growth is lagging and that private capital and entrepreneurs are sitting on the sidelines – who would take the risk to start or expand a business in this climate?

Democrats in Congress have had the Constitutional power of the purse for three years. In the 12 years that Republicans controlled the House, the average deficit was $104 billion. In just three years under Democratic control, the average deficit is now almost $1.1 trillion. I suspect that as the Democratic majority in Congress works its will on the President’s budget it will only get worse.

Unfortunately, so do I.  With Barack Obama in the Oval Office, this nation has known little more than empty words.  Talking the talk when it comes to fiscal responsibility is easy.  Instituting a spending freeze after you’ve already increased spending by more than 80 percent is easy.  Actually sitting down and cutting corners, as so many families across the country are doing as the going gets even more tough, is anything but.

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Comments

  1. elspeth says:

    I thought this was a great analogy on government spending:

  2. elspeth says:
  3. Anonymous says:

    It’s the economy, stupid,
    NO, it’s the Congress, stupid.

  4. whats_up says:

    Jeff,

    You are right that cutting corners is tough, that is why neither party has the stomach for it, they both are more concerned with getting re-elected. It will take a combination of raising taxes and cutting programs to get us back on track.

  5. Dee says:

    Good article. It’s too bad that those (the Administration) will never read it or heed it. Those people with 401K’s only need to look at what happened to them once the Democrats got in control. We owe some money on our Visa card, according to this administration, I should spend some more in order to pay it off. What fools those voters were. Thank you, Jeff, once again for another insightful article.

  6. Jeff Schreiber says:

    Cutting programs, yes. Raising taxes, absolutely not. Show me where raising taxes has increased revenue, in the long-term, in our nation’s history.

  7. whats_up says:

    Jeff said:

    Cutting programs, yes. Raising taxes, absolutely not. Show me where raising taxes has increased revenue, in the long-term, in our nation’s history.

    Jeff I would ask you to look at the economic history under Reagan. He raised taxes multiple times and the economy grew, tremendously in fact.

  8. whats_up says:

    Jeff I might also add that it is fantasy to think that by only cutting expenses that we can wipe away the defecit. Most families that I know get a second job to help offset their deficts, they dont go without food or clothing. That means they increase their revenues.

  9. Jeff Schreiber says:

    I think you need to take a look at your numbers again, whats_up, especially with regard to the income tax rates under Carter and what Reagan did to them.

  10. whats_up says:

    Jeff said:

    I think you need to take a look at your numbers again, whats_up, especially with regard to the income tax rates under Carter and what Reagan did to them.

    Reagan raised taxes in 1982, 1983, 1984 and 1986. The 83 tax increase was on payroll taxes to pay for medicare and social security.

  11. I suppose this is why the Repubs didn’t stand and clap when Obama claimed (in his SOTU speech) he would cut taxes; they knew he was full of crap.

  12. Alena says:

    I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

    Alena

  13. TNelson says:

    Yeah, Obamam did cut taxes on the middle class! It’s a fact! In fact, I get $8.00 more in my check every two weeks because of Obamas tax cut! With that I can stimulate the economy by buying an extra 2.5 gallons of fuel to get to work.

    I feel so lucky to have that giant tax cut that Obama gave me. $16.00 a month! Thanks to special deals at Pizza hut, I can splurge and get a Pizza-a-month.

    Seriously though, how fast could we re-pay the national debt if I just gave that $16.00 a month back to the Govt? It wouldn’t pay 1 minutes worth of interest on our debt. This tax cut was a token tax cut just so he could say “I cut taxes on 75% of Americans taxes, its a fact!” and did nothing, zero, nada, for the economy. taking it away would do nothing for the nation debt! It’s more smoke and mirrors from our president.

  14. Poof! says:

    TNelson, quit berating smoke & mirrors like that. David Copperfield would have a very difficult time without them.

  15. Gail B. says:

    “It was sad–it was sad–
    It was sad when that great ship went down
    (hit the bottom, Brother)
    Husbands and wives, little children lost their lives–
    It was sad when that great ship went down.”

    Is this the United States of America?
    — or the Titanic?!

  16. Gail B. says:

    Frustration is overwhelming. I read everything I can find on the computer, contact my Congressmen, spread the word, and everybody “gets it” except those we put into their seats under the Dome. November cannot get here fast enough.

    At least I have two Republican Senators — Isakson and Chambliss, but a sixth cousin over in California has (gasp!) “Call Me ‘SENATOR’” Barbara Boxer!

    Maybe in November, the day after the General Election Day, those up there can finally tuck their tails and go home. Then, prayerfully, we’ll have CONSERVATIVES who will abide by the United States Constitution to set this Great Ship on its RIGHT (pun intended) course!

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  1. [...] already began to get into, in a piece released earlier today, the effect this budget would have on the deficit and national debt.  But, subject to the [...]

  2. [...] believe the lies. Here are the real deficit numbers Obama isn’t telling you about: http://americasright.com/?p=2926 2010-02-07 23:20:52 · Reply · View BigBlueNY: President Barack Obama thinks [...]

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