No point reading this article, as a picture says it all:
Apparently something major happened in 2000 that really set us on the wrong course. Who knows what that could have been?
And really, as noted in the comments, these deficit projections really do not tell the full story:
The sad part is the debt limit was raised by $850 billion in October, 2007, and again last week by $800 billion. So the official “deficit” of $400 billion or so horribly, unbelievably, understates the real fiscal disaster that is the Bush economic record.
More from the Politico:
Add in the federal debt ceiling, and it’s a reminder of how deep in the red the government already is. The current debt limit of about $9.815 trillion will be exhausted this fall, and the Democrats’ new 2009 budget plan calls for raising the ceiling to $10.615 trillion — an $800 billion increase.
It is enough to make you want to throw up.
Michael
But isn’t this a victory for the “starve the beast” strategy? wasn’t this always the plan. Bankrupt the government so even when you are out of power the new government is not able to provide services of which you wouldn’t approve.
It looks like the government will have to be small enough to drown in the bathtub.
Thanks Grover!
Punchy
I could be wrong on this, but isn’t the entire Iraq/Afghan thing “off the books”, meaning the $100+ billion/year we’re spending there not even accounted for on these projections?
Almost like the ~$0.5 TRILL spent/borrowed doesn’t exist. Except it does, somewhere. But where?
Bob In Pacifica
Well, the good thing is that since the dollar is worth less even though we owe more we owe less than than we would have.
Zifnab
Remind me again of the purpose of the “debt ceiling” if we keep raising the roof every time George Bush wants to borrow a 474 full of money?
donovong
This, along with the fiasco in Iraq and Afghanistan, the embedded incompetence and corruption in nearly all federal agencies (“Justice” in particular), the economic cesspool, the energy problem, the environmental challenges, the disintegrating infrastructure, etc. , etc. ad nauseum…
is Obama out of his fucking mind? Who the hell would want this job?!
Mr. Moderate
Punchy…they are on the books, they just aren’t put into the budget directly but instead through supplemental legislation. They are factored in.
Between the Bush tax cuts, the war in Iraq and additional defense spending planned even before 9/11, we can account for probably $200-$300 billion a year of that. The rest comes from the economic problems we’ve had from 2000-2008, but that can’t all be laid at the feet of the Bush administration. Unless we have a repeat of the 1994-1998 period I don’t think this will get balanced out by either presidential candidate.
buzzrd
On the bright side, the recent deficit is in US dollars which is just about the worst 1st world currency around. So to people abroad, it doesn’t look as bad as it does for Americans.
harlana pepper
It’s all 911’s fault. Case closed.
El Cid
9/11 changed everything. Even stuff that started before it happened. Everything.
Jon H
Fixed.
Ryan S.
Add on this the fact that we are now paying close to 500 billion a year just to service the interest on the debt. This is above 20% of the total government income for the year.
This is what really is troubling. Its already start to really pinch, our infrastructure is already suffering. When the % gets higher when else will we have to cut?
RSA
I must be forgetting something, but why were things looking relatively good from 2004 to 2007 (i.e., as if they were getting better)? Is that just a bookkeeping artifact that got killed by the housing crunch?
bartkid
>Well, the good thing is that since the dollar is worth less even though we owe more we owe less than than we would have.
Uh, that is only true if you had converted US dollars to a another currency back when the USD was worth something.
This reminds me of a novella in a horror story collection from at least ten years back: Mestophiles counsels a circa 1910s-era Faust to take out a loan in the millions of Marks to found a financial empire, and when the loan comes due in 1923, Faust pays it off with a U.S. nickel.
maxbaer (not the original)
So, it’s too late to invest short in the US?
The Moar You Know
Refer to Norquist, Grover, for the details of that plan.
Zifnab
Things were looking good because people were going into debt to finance their way of life. America was “making money” when it went to war, because the government was shoveling cash to major US Industries. When the price of oil goes up, Exxon wins, and that floats a number of other major DOW-linked industries.
The money is there, but its in the hands of a smaller number of people. If I’ve got ten guys with a dollar or one guy with ten dollars, my economy can look like its in good shape either way, right until the bills come due.
The Moar You Know
If by “bookkeeping artifact”, you mean “straight-up lie”, then yes. A lot of the Iraq War funding money has, for accounting purposes, not been counted as part of the deficit.
RSA
Thanks for the context, Zifnab and TMYK.
jenniebee
Clearly, our only way out of this is through extensive, dedicated, and energetic Gold Farming.
Eural Joiner
Bush circa 2008 is looking more and more like Louis XIV circa 1715 – about to leave as a budget-crushing, unsuccessful warmonger who believed in his divine right to do anything he wanted. And we get stuck holding the bag of poo when he’s gone.
How long until 1789?
Ryan S.
Also Bush/Rep Congress changed the ways certain economic values where figured. i.e. making inflation no longer reflect the cost of food or energy.
ThatLeftTurnInABQ
Everything in this statement is correct except for the past tense verb. Not “were”. We still are. The roller coaster is still climbing to the top of the first big drop off. Everybody put your hands up in the air and hope the safety bars are locked down tight over your legs, because there’s going to be some zero-G’s up ahead.
That debt/GDP graph leaves me damn near speechless.
“Shock and Awe” (or perhaps “Awe and Shock” is better) seem like the only words fit for the occasion.
Ryan S.
Although If you want a truly depressing chart look here
rawshark
Why not?
jcricket
This post at the Great Orange Satan pretty handily sums up the problem.
Seriously. For how many years are Republicans and (faux) Libertarians going to posit the “free lunch” theory? And when will Americans stop buying it? I blame them both for our problems.
We have major structural problems across the nation that will require increases in tax revenue (and/or a massive decrease in military spending, coupled with earmarking that money for non-military purposes). Tax revenue to cover those needs will have to come from increased taxes. Those increases can either hit mainly the poor and middle class, or mainly the upper class and ultra-wealthy.
The stuff I’m talking about are needs, not wants, and they are required for our nation to continue its high-quality of life and growth.
* Fixingour bridges, roads, highways, water & sewer systems.
* Massive (overdue) investments in rail/bus transit (and fixing the air travel mess)
* Improvements to our energy system, both through green power, conservation, waste reduction and more refining/distribution capacity.
* Implement national healthcare (although this one is arguably “free” b/c it would cost less than the totals we’re paying into the system now)
* Further down the line we need to fix the dying national parks, improve the basic social safety net (unemployment and homelessness aid)
Unless you are an Idiot^H^H^H^H^HLibertarian, and believe the free market will magically come up with ways to do all that, the government needs money. Or I suppose you could be someone (see Ron Paul or Mish at Global Economic Analysis) who believes all that stuff is just “fluff”.
Well you know what? I’m through with all those people, and their enablers. The rest of us need to get down to work.
rawshark
Sounds like it was a result of policy.
b-psycho
Gee, must be nice to never have to pay debts. Oh, wait…
Delia
Naw. Louis XIV was more analogous to Ronald Reagan. When he died most of the French loved him (except of course for the Protestants who didn’t count and most of whom had been exiled). Oh, and the Third Estate, who never counted, either. They funded the party, just like the late lamented American middle class. But most of the French didn’t see, or want to see, impossible situation he’d set up. The Brits and the Dutch hated him, of course. It was his incompetent and dishonest successor, Louis XV, who really ran things into the ground and is a good stand-in for Our George, and then poor Louis XVI, who wasn’t smart, but would have done all right if fate had granted him and his wife a simple farm in the country, paid the price for the whole mess.
Punchy
Oh sweet Jesus, tell me you’re not a pilot.
liberal
The Moar You Know wrote,
I don’t think that’s true. What’s true is that they can hide it from the projected deficit, because it’s “emergency” (hence “unpredicted”—LOL!) spending, so accounting rules say they can assume it won’t be spent. But after the fiscal year is over, they can’t hide it.
liberal
Mr. Moderate wrote,
I don’t think your numbers are right.
Iraq is costing us well more than $100b/year. The non-Iraq increase in military spending is at least $100b. That’s perhaps $250b right there. That leaves too little at the feet of the Bush tax cuts.
Graeme
While I do respect the WSJ, it amazes me how much it seems (even before Murdoch took it over) to be the house organ of the GOP. It’s weird how they take a story about how wasteful the GOP has been over the past 8 years and turn it into a McCain ad. WTF?
Maybe if the WSJ would be more critical of the GOP, we’d get better (if only slightly) governance from those fools?
Notorious P.A.T.
“Who Wants To Be A Millionaire” premiered on television?
Jasper
In my view the libertarians, and Paul (nominal republican), are closer to the democrats than republicans. At the very least, Paul and Mish and the Lewrockwell.com guys recognize that the current situation is unsustainable. Most especially, that spending a $trillion or so per year in military and national security projects, policing the world, running a worldwide empire, will doom this country long term. And also of course, the libertarians don’t make the ridiculous claim that tax cuts pay for themselves, and they believe that deficits are one of THE causes of the economic mess we’re in. Along with GOP promoted crony capitalism where government apparently exists to serve multi-nationals at our expense.
And importantly, for me, the left and the libertarians agree, or appear to, on privacy and surveillance and executive branch authority issues.
Anyway, IMO, it’s better for libertarians and democrats to align themselves together on the important issues where they do agree. It’s certainly better than the alternative, four more years of GOP rule. Glenn Greenwald is pushing a Strange Bedfellows idea doing that, which I think is a great idea.
Third Eye Open
*DANGER* Un-qualified musings *DANGER*
The first thing you have to account for is that these “philosophies” about how the economy works are pretty much espoused by the same coddled, over-paid Chicago School economists, and their bow-tied progeny.
To truly re-think how we go about dealing with the monster of a modern economy we have, we have to start with the professors, and start right now standing behind the people who are ready to take a relatively broad view of how risk is though of and commodities are valued.
One of my favorite non-fiction reads is “Culture Jam” and the idea that goods and services should have a real valuation, including their negative externalities (e.g. oil) and that shareholders should be on the hook, monetarily, for the outcomes of the property they own.
jcricket
I agree that the “true” libertarians have some things in common with Democrats. But watching Mish’s laughable solution to California’s budget problems (i.e. slash 1/2 the services or more, as I deem them unnecessary) illustrates my problem with libertarians. Sure, we can solve our “immediate” budget problems by simply stopping a lot of stuff, exacerbating long-standing, massive structural problems that need money/attention and creating the massive, long-term issues of the future. It’s carping at the system from the outside while offering a fake solution.
Shorter me: Libertarians are right on some things, often for the wrong reasons. But they are wrong on most things, and don’t believe in government, so why ally with them?
Phoenician in a time of Romans
Add in the federal debt ceiling, and it’s a reminder of how deep in the red the government already is. The current debt limit of about $9.815 trillion will be exhausted this fall, and the Democrats’ new 2009 budget plan calls for raising the ceiling to $10.615 trillion — an $800 billion increase.
To translate this into more accessible terms – it’s like planning your weekly household budget based on your ability to raise your credit limit whenever you want, because you’re the CEO of the bank…
goatchowder
The USA’s first MBA president, and hopefully its last.
If any CEO ran a company the way Bush ran the country, he’d have been pushed out years ago.