I just heard Al Franken make a great point, and I'd like to share it with you.
Right now, Bush is crowing about the reduced deficit ($296 billion, as opposed to $413 billion in 2004), created by an increase in federal tax revenues. The "reduced" deficit is, of course, still a horror. Nothing can change the fact that the last three Republican presidents (especially W) have run up the worst debt in history. Roughly one-fifth of your tax dollar (some have offered higher estimates) goes to pay for the interest on borrowed money -- and a lot of that money came from communist China and the Arabs. Our national debt is now nearly 200% of the size of our entire Gross Domestic Product. (At the end of WWII, debt was around 4% of GDP.)
This year, it is true, federal revenues hit $2.1 trillion, an increase which has helped the debt burden to some degree. On his program last night, Bill O'Reilly misleadingly compared this number to the $1.5 trillion in revenues under Bill Clinton -- in 1995. O'Reilly claimed that lowering taxes raises overall revenues. He also claimed that lowering taxes on the rich helps "the poor" most of all.
Here's the catch. Look at the year O'Reilly chose: 1995. When Bush came into office in January of 2001, federal revenues were $2.3 trillion -- due, in large part, to Clinton's more progressive tax rates. Clintonomics gave us a surplus.
Also keep this mind: The population of the country has increased by 6% during the intervening years. Sky-high housing and transportation prices have made inflation a significant factor.
Have Bushonomics really helped the least among us, as O'Reilly would have us think? The number of Americans in poverty has increased every year under W. The numbers of Americans in poverty decreased dramatically under Clinton. If Bill O'Reilly thinks otherwise, perhaps he should consult the expert opinion of the folks who run inner-city rescue missions.
Some say that Democrats should run on ideas. Here are mine: Re-institute Clinton's progressive tax rates and make them steeper, especially on the top CEOs. Stay out of costly wars. Get tough on military/industrial corruption. Pay off the debt. When we no longer have to make those crippling interest payments, then we can reduce taxes -- safely, sensibly and permanently.
(Note: In the original version of this article, I said that one-third of the tax dollar goes to pay the interest on the debt. I could cite my source for that, but that wouldn't make my mistake "all better." Most sources give a figure that is lower but still intolerable.)
6 comments:
Here's a site with some interesting figures:
Gross External Debt Position
($9,560,623,000,000)
sofla said:
Joe, your figures on the debt to gdp ratio are not correct, nor even proportionally off. You've got it essentially backwards with regard to post-WW II and now.
Quite famously (I thought, anyway), the national debt reached a high of about 120% of gdp at the end of, and naturally as a result of, the WW II spending/borrowing. Back in the day, the old world record deficit (possibly still largest in real dollars) was the $65 billion borrowed in one year alone (measured in early-1940s dollars).
Ever since that high peak of debt to gdp was reached, it declined as a ratio up through the Carter years down to maybe 20% of gdp, until the Reagan deficits about doubled that percentage, iirc. Obviously, Clinton reversed that increase of that ratio, and then Bush the lesser again started jacking it back up.
However, gdp is at least $12 trillion, maybe $15 trillion (sorry, too lazy to verify just now). Total national debt has been raised from about the $5.5 trillion range to maybe $8.5 trillion. Hence the debt to gdp ratio is not more than about 75%, maybe more like 60%.
Not a good figure, and the direction is wrong, and frankly devastating to our future prospects as a country, for our SS system, etc. Your overall point is correct. But not these numbers.
We have NEVER had a debt to gdp ratio of 200%, the worst we've seen being closer to half that figure, and occuring not now, but after the WW II time you incorrectly assert had an extremely low figure in this regard.
sofla said:
I've been trying to figure out a way to get a number closer to yours here. Perhaps the figure is total national indebtedness (including both US government plus personal debts), which may indeed be about 200% of gdp.
But 'national debt' doesn't normally cover the debts citizens have incurred for themselves individually, nor does that work to save the '4%' number supposedly after WW II.
Upon review, it appears the post-WW II debt to gdp ratio went from a high of 120% to a low in the low 30%s in the late-'70s, about doubled into the mid 60%s under Reagan/Bush, brought down into the mid-50%s under Clinton, and back into the higher 60%s under this Bush.
Please. The numbers you all are playing with are meaningless, as they are so massaged for effect.
The total indebtedness of the federal government is now about 59 TRILLION. That takes into account everything, including SS, federal pension, and Medicare obligations, including the new seniors' drug benefit entitlement. That is 400% of GDP (which is inflated already, because the CPI is understated).
Don't dismiss this 59 trillion figure. That is what the total debt would be if general accepted accounting principles were used.
All government figures on the debt, economy, unemployment, rate of inflation, etc. are all lies that become more outrageous with each administration.
Back in a moment...
From current sidebar, Buzzflash:
(snip)
"The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.
A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.
Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.
According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''."
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