Thursday, June 11, 2009
(graphic: U.S. National Debt Clock)
The good news for supporters of President Barack Obama is that he may not be nearly as responsible for the ballooning state of the national debt as Republicans like to claim. The bad news is that even if President Obama isn’t contributing significantly to annual deficits, he’s still a big part of the problem because he has no sound answer for erasing the red ink.
David Leonhardt at the New York Times went back through a decade’s worth of Congressional Budget Office data and determined that four factors have combined to create the current deficit. First, the 2001 recession and the current economic decline account for 37% of the problem, having robbed the country of billions of dollars in growth, and consequently, billions in needed tax revenues. In addition, there are the increased expenditures for safety-net programs to help unemployed Americans.
Second, about 33% of the fault belongs to the policies of President George W. Bush, specifically his numerous tax cuts and the Medicare prescription drug benefit.
Third, 20% is shared by Bush and Obama, because of the current president’s choice to continue certain policies inherited from his predecessor. These include the war in Iraq, tax cuts for households making less than $250,000, and the Wall Street bailout.
That leaves only 7% that’s purely Obama’s fault, stemming from the February stimulus bill and his plans for changes in health care, education, and energy, among others.
The president’s advisors insist rising annual deficits can’t be addressed without solving the problem of a costly health care system, and on this point Leonhardt agrees. The problem, though, is that Obama hasn’t devised a politically-sound way to trim the wealth that’s pouring into the pockets of doctors, insurance companies, and the pharmaceutical industry. And even if he can come up with a way to do this, other strategies will be needed to curb short-term dangers that may arise from all the debt the U.S. government is already carrying.
-Noel Brinkerhoff
America’s Sea of Red Ink Was Years in the Making (by David Leonhardt, New York Times)
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