For many, perhaps most of you, this will not come as a surprise. After all, Obama has outlined this general budgetary reality before, though given the political times we live in, thick layers of redundancy are required to get get simple points across and rational analysis of facts and information has been outlawed for many years by the mainstream media. In many ways, we are on our own, yet on the major issues about the function and responsibilities of government to its citizens, we are in the majority. That dilemma is one reason why it’s worth paying attention to the Federal budget analysis recently made available by the Center on Budget and Policy Priorities (CBPP), an analytical budget think tank centered in Washington DC. They have compiled an analysis which describes how the U.S. public debt was created during the 21st Century, and how it projects forward to the year 2019. It’s quite simple and yet timely because right now the Republicans and some Democrats believe that debt reduction is critical for our financial future and they want to reduce the debt by major reductions in social services, while keeping tax cuts for the wealthy on a continuous upward trajectory. The results of this analysis and debt projections into the future are illustrated graphically (Fig. 1) and express different debt sectors as a percentage of the GDP. The numbers used in compiling this graph are based on data from the Congressional Budget Office (CBO); they thus represent data that should resonate with every member of Congress. The CBPP debt analysis was divided into six different sectors including i) the Bush-era tax cuts (which primarily favored the wealthy); ii) the wars in Iraq and Afghanistan; iii) the economic downturn; iv) the TARP, Fannie and Freddie bailout funding; v) debt from recovery measures and vi) “other debt.” What jumps out at you from a glance at the graph is how the Bush-era tax cuts dominate our debt picture and how the slope of that contribution keeps rising into 2019, exceeding the slope of any other budget segment. At the opposite end, the debt from the “other” category (gray) was actually decreasing during the Bush presidency so that without our financial collapse (two of them), the tax cuts and our two wars, the United States would have payed down its comparatively small national debt, which was projected to reach zero, near the end of the time line in the graph. In other words without GW Bush for eight years, we might have had a financial nirvana by now. Just think of that foregone possibility and our current inability to begin investing significantly in our infrastructure and gearing up for the major debt we have to our children–to provide them with a safe planet! What a difference eight years of a failed presidency can make.
Of course, you could ask yourself whether the rich were already being taxed unfairly, meaning perhaps we have been spending at unreasonably high, unsustainable rates, which is what the Republicans want us to believe. So, that brings us to the second graph (Fig. 2)which shows how the tax burden on the wealthiest 1% of Americans actually decreased from over 35% in 1979 to under 30% in 2007. Doesn’t it make sense that the wealthy do in fact owe more to America because their wealth has been made possible by the organizational features and infrastructure of our country, including the business, financial and trade centers that we have built up over several centuries?; it does not seem unreasonable that the wealthy should and could be paying significantly more to enjoy the advantages they have by living in America. What percentage of their income is provided by the circumstantial support mechanisms that are part of our economic vitality? The wealthy should be among the most grateful of Americans and yet, Ronald Reagan encouraged them to believe they should be entitled to keep it all and that possibility seems to be the road now being paved by the Republicans. Surely, for some of the wealthy, we even provided a large measure of their motivation for wealth by telling them how to make money, pitfalls to avoid and how to develop a sensible strategy for wealth accumulation, though I hope we didn’t teach them how to avoid paying taxes. For that job of course, we have Mitt Romney, who made his fortune guiding wealthy clients into off-shore tax havens and shelters that only the rich can enjoy.
So, the graphical data would seem to argue, just from the principle of fairness, that the wealthy could and should pay more in taxes and if we had maintained that policy, if Gore rather than Bush had been elected (heaven forbid that we would honor the public vote which Gore won by more than half a million votes). It is clear from this analysis that the most significant, upward-trending factor in our public debt are the accumulated lost revenues from the Bush tax cuts, which were created out of borrowed money. You will note that the other factors seem to level off in the 2012-2013 period, whereas the projected impact of the tax cuts continues to expand the debt. This is one reason why Obama has drawn a line in the sand against supporting continuation of the Bush tax cuts, which he wants to end in 2012. This analysis reveals something we already knew: the major portion of our current and future public debt can be laid at the doorstep of the GW Bush administration policies and not, as the Republicans want everyone to believe, because of the two plus years of the Obama Presidency. This new graphical reality of our budgetary debt was not allowed to lie fallow by House Minority Whip Steny Hoyer, who used the data to hammer away at Republicans; they will undoubtedly have more to say on this subject as soon as they check with the Heritage Foundation, members of whom fashioned the Ryan budget plan, now the Holy Grail of the Republican party.
Finally CBPP has also analyzed the Ryan Republican budget–now there is proposal made out of smoke and mirrors. Again this analysis uses CBO numbers: from CBPP “That means that, despite proposing $4.3 trillion in what would be the most severe and wrenching budget cuts in U.S. history — two-thirds of which would come from programs for people of low or moderate incomes — the plan barely reduces deficits at all over the next decade. That’s because his budget cuts are offset by $4.2 trillion in tax cuts that would go disproportionately to those at the top. In essence, at least for the next decade, this plan is far less a blueprint for addressing deficits and far more a proposal to redistribute large amounts of resources from those at the bottom to those at the top.” Rather than saving $ 1.6 trillion over the next ten years, Ryan’s budget proposes to provide tax cuts of $4.2 trillion over ten years, while programmatic reductions amount to $4.3 trillion resulting in a savings of $155 billion over ten years, far short of his announced projections. Ryan’s budget is not a serious budget proposal–its a wealth transfer program from the poor and middle class to the wealthy. It has been put out by the Republicans who think they have the financial power, with corporations that can act like free wheeling citizens, powered by unrestricted in campaign donations, to take over the Senate, keep their majority in the House, capture the Presidency in 2012 and put through serious budget cuts tearing up the social contract between our government and its citizens. In other words, the Republicans plan to shatter the last remnants of the New Deal. As a proposal that lacks credibility, the Republicans are no longer embarrassed by bringing forward proposals that don’t make sense and can’t pass the smell test. The Ryan budget is blatant raw political power at work–they don’t need to explain it except as they choose. They have announced what they are going to do and assume they have the organization and financing to push it through and change America. As Democrats, liberals and progressives, we should take this challenge seriously and make sure the election of 2012 does reshape America, but in a direction opposite to that proposed by the Republicans. Polls show that 78% or more of Americans do not want to cut Medicare and transfer it to a government voucher program as the Ryan budget proposes to do. But those 78% need to show up and vote accordingly and in many states they will have to make sure they have a photo ID in order to vote. Getting lost in the culture wars at this stage of the debate–the end stage– will not help get the results that are needed. The political battle of the new century will take place in 2012. It will be a question about whether the Bush tax cuts are eliminated or whether we enter into a new round of wealth transfer from the bottom to the top.
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