Posted on 12/29/2012 11:43:16 PM PST by Kaslin
As the following chart from Investor's Business Daily demonstrates, The Bush Tax Cuts didn't starve the federal treasury – revenue flooded in as the economy expanded from the pro-growth policies implemented in 2003 and continued until the sub-prime mortgage market collapse.
Even with the anemic Obama economic recovery, revenues are again nearly equal to the level required to fund the government had spending over the last fifteen years increased at the rate of population plus inflation growth. But, that has not been the case.
The pox on Bush and the Republican majorities is that while revenues soared following implementation of the 2003 tax cuts, spending did as well. To be fair, much of that increased spending was related to the war on terror following the September 11, 2001 attacks.
Also, the rate of GOP spending increases pale in comparison to what happened when Democrats took control of Congress beginning in 2007 and further accelerated when Obama moved into the White House in 2009.
Federal revenue rose from $1.7 trillion to $2.4 trillion from FY 1998 to 2012 as indicated. "Revenue growth averaged 2.9% annually, despite two recessions, bear markets, - and tax cuts," as David Hogberg explained in the feature article accompanying the IBD graphic.
However, federal spending rose nearly twice as fast – 5.7% per year – surging from $1.6 trillion to $3.5 trillion over the same period, notes Hogberg.
Further, the chart shows that if spending had increased over the period at the same rate as population and inflation, revenue would have trended upward about the same even allowing for the effects of the recessions. But, current spending levels are nearly $1 trillion beyond what population-plus-inflation growth increases would have dictated.
Hogberg calculates that had spending from FY1998-2012 increased consistent with population-plus-inflation growth, revenues would have exceeded spending by $177 billion – a net budget surplus! Instead, because of the dramatic increase in spending, the federal government racked up an additional $6.7 trillion of new debt.
Every objective observer knows that the elephant in the room is the out of control rate of spending increases over the last many years. True to form, however, Washington – and particularly Barack Obama - is laser focused on who they can raise tax rates on and by how much. Their efforts would be better directed at putting the Spending Genie back in the bottle.
To be fair, much of that increased spending was related to the war on terror following the September 11, 2001 attacks.
-- snip --
Many forget or ignore this
That plus when the economy crashes voters demand more and more gubmtnt spending, and yes higher taxes on ‘the rich’ if they are told we cant afford the spending .
Its a political reality.
You are correct, unfortunately
Spending is still out of control.
this is all to entrench the socialist state in america.
why they don’t pass yearly budgets, harder for people to track the spending.
why they stopped reporting m3.
to bring full socialism they can’t allow any reductions in spending.
also the rich - an ever-changing subjective term - always must be the scapegoat. not the govt who’s spending us off the fiscal cliff.
socialism needs a Goldstein, and right now it’s christians, pro-2A folks, “the rich”, and republicans.
I beg to differ, at least since Obama’s tenure.
Recent truth reports on the conservative side of the political spectrum during the campaign indicated that there were over $1.2 Trillion dollars extra entitlement spending, beyond that paid for Social Security and Medicare, spread over something like 80+ programs.
This is roughly the amount of deficit spending from which we are suffering and it is the reason why Obama won the election.
“To be fair, much of that increased spending was related to the war on terror following the September 11, 2001 attacks.
— snip —
Many forget or ignore this”
I disagree. If the “war on terror” was necessary it should have been funded either through reduction of other expenditures or tax increases. One of the problems we have as a nation is being unwilling to fund the extraordinary expenditures through taxes or changing spending priorities.
LBJ and Nixon funded a Vietnam War and “war on poverty” with debt instead of raising taxes. This resulted in a rapid decline in the value of the dollar versus gold resulting in Nixon taking the nation off the discipline of the gold standard in 1971. Turning our currency into a fiat currency instead of addressing the deficit spending has allowed the government following Nixon to spend without consequences.
We will not get back on sound financial footing until we bring spending below revenue and use surpluses to pay off the mountain of debt. This means making hard choices. Bush could have raised taxes to fund the “war on terror” or changes spending priorities - not spending in other areas (i.e no Medicare prescription drug program, no explosive increase in education spending). He could also have prosecuted the war in a less costly manner. Did we really need to conquer and rebuild Iraq? Could we have wiped out the Al Queda training camps in Afghanistan and Pakistan with a 2 year ground and air engagement instead of engaging in a decade long occupation? The choice Bush made was to not only wipe out the attackers (which he didn’t accomplish in 8 years) but to nation build. The expense was the nation building.
The $700 billion Toxic Assets Relief Program, was also passed during the Bush Administration. Bush signed it into law. This was a government funded bail out of the private sector banks and a new expenditure not funded with taxes or reduced spending in other areas. Another much less expensive option would have been allowing the banks to fail and go through the normal bankruptcy process.
From beginning to end of George W. Bush’s two terms, domestic spending increased as a % of GDP by 5.6%, the highest of any president since FDR. Bush failed to use his veto pen, he allowed domestic spending to increase beyond the rate of inflation and population growth, he engaged in two unfunded wars, he added a huge new entitlement (Medicare Prescription Drugs) and he greatly increased federal spending for education (No Child Left Behind). The Bush legacy was the LBJ/Nixon legacy of rapidly increasing domestic spending while fighting unfunded wars.
“To be fair, much of that increased spending was related to the war on terror following the September 11, 2001 attacks.
— snip —
Many forget or ignore this”
I disagree. If the “war on terror” was necessary it should have been funded either through reduction of other expenditures or tax increases. One of the problems we have as a nation is being unwilling to fund the extraordinary expenditures through taxes or changing spending priorities.
LBJ and Nixon funded a Vietnam War and “war on poverty” with debt instead of raising taxes. This resulted in a rapid decline in the value of the dollar versus gold resulting in Nixon taking the nation off the discipline of the gold standard in 1971. Turning our currency into a fiat currency instead of addressing the deficit spending has allowed the government following Nixon to spend without consequences.
We will not get back on sound financial footing until we bring spending below revenue and use surpluses to pay off the mountain of debt. This means making hard choices. Bush could have raised taxes to fund the “war on terror” or changes spending priorities - not spending in other areas (i.e no Medicare prescription drug program, no explosive increase in education spending). He could also have prosecuted the war in a less costly manner. Did we really need to conquer and rebuild Iraq? Could we have wiped out the Al Queda training camps in Afghanistan and Pakistan with a 2 year ground and air engagement instead of engaging in a decade long occupation? The choice Bush made was to not only wipe out the attackers (which he didn’t accomplish in 8 years) but to nation build. The expense was the nation building.
The $700 billion Toxic Assets Relief Program, was also passed during the Bush Administration. Bush signed it into law. This was a government funded bail out of the private sector banks and a new expenditure not funded with taxes or reduced spending in other areas. Another much less expensive option would have been allowing the banks to fail and go through the normal bankruptcy process.
From beginning to end of George W. Bush’s two terms, domestic spending increased as a % of GDP by 5.6%, the highest of any president since FDR. Bush failed to use his veto pen, he allowed domestic spending to increase beyond the rate of inflation and population growth, he engaged in two unfunded wars, he added a huge new entitlement (Medicare Prescription Drugs) and he greatly increased federal spending for education (No Child Left Behind). The Bush legacy was the LBJ/Nixon legacy of rapidly increasing domestic spending while fighting unfunded wars.
When McCain was debating obama, McCain proposed an across-the-board 10% spending cut. He was ridiculed and dismissed for being shallow and over-reaching. We don’t need a hatchet, we need a scalpel is what obama said. Some scalpel! The feds have their blood funnels up everyone’s asses and they’re staying there until we all bleed out.
Question for Obama:
Mr President you often say our fiscal crises was caused by the Bush tax cuts, two unfunded wars, and prescription drug coverage under Medicare. If that is true how do you explain the fact that revenues to the federal government were the highest in history in 2007, and that our deficit that year was only 10% of the average of all deficits during your first term?
Bush was apparently advised that the fall of Saddam Hussein would lead to a new era of prosperity in the Middle East, and that the economic benefits to the USA would greatly outweigh whatever we had to spend in the short run to make it happen. Even if that meant letting the Democrats have their way on social spending (as Reagan also did in the 80's) to gain their cooperation.
Given the cascading fallout from that grossly incorrect advice, it is fair to say that Bush took a hasty shot at Arab fascism and the bullet passed through the target and struck America right in the heart. When Bush and the Republicans lost the trust of the American voter, they lost the war to our true, domestic enemy.
Faux Conservatives refuse to acknowledge the good bush did.
Bush brought the deficit down to 160 billion in 2007. Our deficit is now ten times that amount.
When faux conservatives saw fit to turn congress to the democrats in January 2007 spending exploded.
Faux conservatives happily assign this spending to bush. Bush’s tarp bill had payback provisions with interest something Obama and other democrat spending does not.
Bush was more conservative than McCain or Romney but we have to hear endlessly about how he is as bad as Obama. It’s ridiculous and false.
Kudos to Kaslin for posting the truth.
I think good arguments can be made that bush was more conservative than Reagan. The bush fiscal plan was working until 2007. Democrats obliterated that in cooperation with faux conservatives seeking to teach bush a lesson on immigration in fall of 2006.
Bush’s main mistake was not providing a viable vp to continue his legacy as Reagan did.
Well said, thanks!
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