Just the Simple Truth (Mostly)

Check out this little article I stumbled upon in my blogger reading today: Just the Simple Truth. For those of you who are a little bit more lazy here's a pertinent part where the author is quoting President Obama: "But after the Democrats and Republicans committed to fiscal discipline during the 1990s, we lost our way in the decade that followed. We increased spending dramatically for two wars and an expensive prescription drug program-but we didn't pay for any of this new spending. Instead, we made the problem worse with trillions of dollars in upaid-for tax cuts-tax cuts that went to every millionaire and billionaire in the country; tax cuts that will force us to borrow an average of $500 billion every year over the next decade." Let's parse this paragraph and look at the basic assertions the President is making in this speech, stripped of their rhetorical ornamentation.

1. Both parties were involved in "fiscal discipline" during the 1990s. (I believe this is a reference to balanced budget we had for a few years in the late 90s.)


2. Spending increased significantly during the 2000s thanks to two wars and Medicare part D.


3. Tax cuts during the 2000s prevented a lot of revenue from being collected from those in the highest tax bracket.

Assuming my interpretation of item one is correct, all of these assertions can be shown to be true.
I don't want to get into the policy angle of whether the extra spending on wars and Medicare was a good idea or the decision to reduce tax income as a whole. Clearly, though, we can say that this combination did not end up working out well in terms of balancing the budget. I know there are plenty of people out there that are philosophically committed to trickle-down economics but in this case the lower taxes rates didn't generate more tax dollars and the budget got way out of balance. Its worth noting that Wisconsin Representative Paul Ryan's assertion that "the more you tax something, the less of it you get" may be true; our budget wasn't balanced through the 2000s, though. It didn't seem to work for that decade.
Here's my main point: assuming the above three facts are true, their validity is a red herring in the larger problem of our national debt. Here's one of many graphs you can find online showing our annual federal deficit over the years, this one in terms of GDP rather than just dollars (to try to level out effects of economic growth).


The simple truth that isn't acknowledged by the President or stated in the article I linked to is that the "fiscal discipline" that resulted in a budget surplus for a few years at the end of the 90s was an aberration. From 2011 all the way back to the 1960s it is clear that this period of time is the only one where we had a balanced budget for any significant length of time. It appears there are a few toe-dips into balanced-budget territory over the last half-century but they are minor and are in no way equivalent to the massive overspending that happened in all the remaining years.
We have a systemic problem. For many years now, our country has not been living within its means and this is a trend that we cannot afford any longer. We need to get serious about our problem and make some hard choices. We can not continue to borrow money for government programs and somehow expect to never have to pay it back. There are good programs that are working well that we will need to cut; there are tax breaks that seem fair and good that will have to be removed. We are so far in debt and it is unreasonable to expect that we can get back to living within our means without making significant sacrifices. Our expectations and lifestyles covertly subsidized through our government in the form of low taxes and expensive government programs are unsustainable.
I'll end with the political finger-pointing. Republicans, you have abandoned any claim of being fiscally responsible based on your performance this past decade. I know you believe in lower taxes but you have to also believe in lower spending as well. In fact, during times of national crisis like the launch of our war on terror, you might even need to increase taxes to pay for the military activity or cut other programs so that our budget can stay balanced. Wars don't pay for themselves and emergency overspending for a few years needs to be followed with determined underspending to pay all that debt back.
Democrats, specifically President Obama, its hard for us to take you seriously as a man determined to balance the budget. You inherited a difficult situation in 2008 and choose to try to spend your way out of it. You and your allies are the ones responsible for the spike in the national deficit at the far right-hand end of the graph. You too need to find a way to generate huge budget surpluses to counter-act the huge spending we just went through.
To both parties I say this: I have a house that is always falling apart, a car that needs repair even more regularly and family members who get sick. I understand that there are months that we need to spend more than we make because of these emergencies that pop up. But you know what happens next month? We spend less to make up for it and replenish any emergency savings that has been depleted. Nobody would let me overspend for 35 out of the last 40 years of my life and call me fiscally responsible. They wouldn't lend me a dime.