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Transcript #163 Budget Deficits & The National Debt:
Right-Wingers Spend Wildly And Slash Taxes (For The Rich), Then Scream We Can't
Afford A Social Safety Net Partially hyperlinked to sources.
For all sources, see the data
resources page. Your sources today include: the New
York Times, mediamatters.org, the Washington Post, newbusters.org,
talkingpointsmemo.com, the website of the Congressional Budget Office,
whitehouse.gov, commondreams.org, and foxnews.com. In the last couple of podcasts,
you've heard about obviously life-and-death issues like Haiti and health care.
When I started looking into today's topic, federal budget deficits and
the national debt, it didn't seem like any kind of a similar moral screaming
issue, and I figured I'd just be putting together a short segment. But the more I got into it, the
madder I got about the right-wing's blatant lies and hypocrisy, and the
mainstream media's silent complicity in the right's propaganda campaign. And you may be as surprised as I was
at how it winds up being, yes, a screaming, life-and-death moral issue. I'm going to stretch out here and
give this subject the attention it deserves. So why don't you sit back, relax, and
stay for the ride? I think you'll be
glad you did. Whenever I see or hear a right-winger
lie, I wonder to myself, would they dare say that face to face to someone who
they know understands the real facts, someone who will throw the truth back at
them with full force, and obliterate them? I
always imagine me talking back to the likes of Sean Hannity and Bill O'Reilly. Now of course, Hannity and O'Reilly
do have nominal non-right-wingers on their programs.
They have on their shows ConservaDems, meek timid Dems, Dems who don't
even seem to know the basic facts needed to refute the right's lies,
kowtowing-to-stay-on-the-program Dems. Anyway, recently a right-winger
spouted off a talking point lie about Barack Obama directly to the face of the
one person in the world who obviously would not take kindly to a lie about
Barack Obama. Who did the
right-winger tell the lie directly to, face to face?
Barack Obama! Let me set this up: Last month the Republicans in the
House of Representatives held
an Issues Conference in Baltimore, MD. As
media outlet after media outlet put it, who "strode into the lion's
den," other than that apotheosis of all the right claims to oppose,
President Barack Hussein Obama. After addressing the conference,
Obama spent over an hour taking
questions from the assembled GOP lawmakers. Well, near the end of the Q and A,
Representative Jeb Hensarling of Texas got his turn.
He took a long time to get to his question.
He essentially made a speech first, chock full of one right-wing
distortion, half-truth and lie after another.
I'll spare you his first minute and 30 seconds of blather, and pick him
up at that point for your listening pleasure: audio: Rep. Jeb Hensarling HENSARLING: [W]hat
were the old annual deficits under Republicans have now become the monthly
deficits under Democrats. The national debt has increased 30 percent. Now, Mr.
President, I know you believe -- and I understand the argument; I respect the
view -- that the spending is necessary due to the recession. Many of us believe,
frankly, it's part of the problem, not part of the solution, but I understand
and I respect your view. But this is what I don't
understand, Mr. President. After that discussion, your administration proposed a
budget that would triple the national debt over the next 10 years. Surely you
don't believe 10 years from now we will still be mired in this recession. It
proposed new entitlement spending and moved the -- the cost of government to
almost 24.5 percent of the economy. Now, very soon, Mr.
President, you're due to submit a new budget and my question . . . OBAMA: Jim (sic), I know
there's a question in there somewhere, because you're making a whole bunch of
assertions, half of which I disagree with. (LAUGHTER) And I'm having to sit here
listening to them. At some point, I know you're going to let me answer. HENSARLING: That's . . . OBAMA: All right. HENSARLING: That's the
question. You are soon to submit a new budget, Mr. President. Will that new
budget, like your old budget, triple the national debt and continue to take us
down the path of increasing the cost of government to almost 25 percent of our
economy? That's the question, Mr. President. Hensarling addresses two issues here.
One is in his claim that Obama has monthly deficits as large as
Republican annual deficits. The
second, is that Obama will triple the national debt. Before you hear Obama's response,
let's clear up some definitions. These
are two terms that people often confuse, the deficit and the debt.
Frankly, I only got them straight in my own head a few months ago after
concerted effort. The deficit relates to the budget.
The budget deficit is the shortfall between what the government takes in
in revenue any given year, and what it spends that year.
If the government takes in $2 trillion and spends two and a half
trillion, then the deficit that year is half a trillion dollars. The government will borrow the
difference to cover the shortfall. In my example, the government would borrow
half a trillion dollars. The debt relates to the historical
total of all that governmental borrowing. It's
usually called the national debt. The
national debt is the total amount of money the federal government has borrowed,
and owes, as a result of borrowing to cover annual budget deficits over the
years. So in the example I just gave you,
when the government borrowed a half a trillion dollars to cover that year's
budget deficit, at the same time, the national debt increased half a trillion
dollars as well. Ok, here's the beginning of Obama's
reply. He starts by addressing
Hensarling's claim about Obama's supposed ballooning of the deficit: audio: Barack Obama All right. Jim (sic), with all due respect, I've
just got to take this last question as an example of how it's very hard to have
the kind of bipartisan
work that we're going to do, because the whole question was structured as a
talking point for running -- running a campaign. Now, look, let's talk about the budget, once again,
because I'll go through it with you line by line. The fact of the matter is, is that when we came into
office, the deficit was $1.3 trillion. $1.3 trillion. So -- so when you say that
suddenly I've got a monthly budget that is higher than the annual -- or a
monthly deficit that's higher than the annual deficit left by Republicans,
that's factually just not true, and you know it's not true. And what is true is that we came in already with a
$1.3 trillion deficit before I had passed any law. Let me flesh this out a bit here.
It's necessary to clarify another bit of terminology again.
You need to know that the federal fiscal
year runs from October 1 through September 30.
It doesn't coincide with the calendar year. A way to think about it is, the
fiscal year starts three months earlier, is three months ahead of, the calendar
year. So in the last year of someone's term
-- that someone, for example, being perhaps our good friend and dearly missed
President and exemplar of all that's good and decent in America and indeed with
all of humanity, George W. Bush -- in the last year of George W. Bush's term,
Bush submitted a budget for fiscal year 2009 which runs from October 1, 2008
through September 30, 2009. So when the next president, who I
guess in this case would be that gentleman Barack Obama, when Obama took office
in January 2009, during the first 9 months of his term, the federal budget was
the one passed when George W. Bush was still president. With that in mind, let me tell you
about the right's lies about Obama and the deficit. Hensarling used the smear, that
Obama's monthly budget deficits were larger than the Republican yearly deficits. The more common right-wing propaganda
point about Obama massively increasing the budget deficit takes the form of
screaming that Obama has tripled the deficit in his short time in office. How can the right make this claim
with a straight face? They really
can't, but they do, and often get away with it, because the mainstream media
doesn't call them on their lies. Here are the details. The Congressional Budget Office, the
CBO, is a non-partisan research arm of Congress.
When it issues numbers, they are generally accepted by both the right and
the left. In October of 2009, the CBO estimated
that the fiscal year 2009 budget deficit would be $1.4 trillion. To get our small sums of money
terminology in synch, a trillion is a thousand billion.
So the 2009 fiscal year deficit was projected as 1,400 billion dollars,
$1.4 trillion. The Fox News website ran the straight
Associated Press story about this. But
Fox, being the lying propaganda machine we all know and love, put a whopper
of a headline
on their link to the AP story. Their
headline? "Obama Triples Budget Deficit to
$1.4 Trillion" The way Fox would have you see
things, during fiscal year 2008, the budget deficit was about $459 billion.
Since in the next fiscal year 2009, the deficit had gone up to one
thousand four hundred billion, $1.4 trillion, and Obama was president in October
2009, Obama is obviously responsible. If I've been clear enough until now,
you probably already see the deliberately faulty reasoning that Fox is
employing. As I told you just before, the fiscal
year 2009 that the CBO is referring to, started in October, 2008, when George W.
Bush was still in office. Fiscal
year 2009 ran until the end of September, 2009.
That was all under George W. Bush's budget. Yet Fox News attributes the entire
rise in the fiscal year 2009 budget deficit to Obama. Maybe, you're thinking, Obama did
stuff when he took office that actually was the cause of the tripling. No, that's definitely not the case. About two weeks before Obama was inaugurated, the CBO issued a looking ahead report
on the fiscal year 2009 budget. Again,
that would be the budget passed under George W. Bush, for the federal fiscal
year running from October 1, 2008 through September 30, 2009. -- straddling the
end of Bush's term and the first nine months of Obama's term. The CBO projected that based on
Bush's policies in place and economic conditions expected, that the fiscal year
2009 deficit would be $1.2 trillion dollars. So before Obama even took office,
before he could or did do anything, the CBO said the fiscal year 2009 deficit
would be $1.2 trillion. Since both the fiscal year 2008
budget with a $459 billion deficit, and the fiscal year 2009 budget with a $1.2
trillion, one thousand two hundred billion dollar projected deficit were all on
George W. Bush's watch, it's Bush who actually tripled the deficit in one year.
Not Obama! At worst, Obama's policies added $200
billion to the initial $1.2 trillion dollar estimate, a rise of one-sixth, not
tripling. As you can imagine, the right-wing
echo chamber ran with this false "Obama tripled the deficit" lie,
because it fits in so well with the right's eternal painting of the Democrats as
profligate spenders. Dick Morris and Glenn Beck on Fox,
and Karl Rove in the Wall Street Journal, now another Rupert Murdoch
publication, were among those who helped spread
the word. From these head honchos, the
right-wing blogosphere took up the chant
as well. The bottom line of all this: if a
right-winger tells you Obama tripled the deficit, tell them they're 100% wrong:
the deficit was tripled by their guy, George W. Bush, in his last year of
office. Ok, in a moment, you'll listen to
Sean Hannity make the lie even worse, hear the rest of President Obama's
response to that Texas right-wing congressman, and find out why this is a
screaming moral issue. Stick around. BREAK Ok, you just heard about the right's
totally untrue claim that Obama tripled the budget deficit.
It was George W. Bush who, in reality, did that. Not to be outdone in the lie
department, that man we can all depend on, Sean Hannity, didn't accept the
triple-the-deficit lie. Not good
enough for him. No, this is what
Hannity said: audio: Sean Hannity Now, in Bush's worst year,
deficit-wise, which was 400 -- a little over $400 billion. We now nearly
quadrupled it in a year. And Obama tells us he's going to be fiscally
responsible, and it's even higher this year with his budget proposal than the
record deficit -- four times Bush's the year before. Hannity either can't do simple
arithmetic, or just decided to make what he already knows to be an untruth, even
more so. Let's now dig
down
a bit deeper. It gets even worse, as
far as right-wingers are concerned. When I told you Bush tripled the
deficit, it's not like he inherited that $459 billion fiscal year 2008 deficit
that he tripled for fiscal year 2009. No, Bush actually inherited a surplus
from Bill Clinton. When President Bush took
office in 2001, the federal budget had been in the black for three years, and
continued surpluses were projected for a decade to come.
The Congressional Budget
Office estimated then that the government would
run an average annual surplus of more than $800 billion a year from 2009 to
2012. Today, the government is expected to run a $1.2 trillion annual deficit in
those years. That’s a $2 trillion swing, two
thousand billion. From positive $800
billion in the black under Clinton, to negative 1200 billion in the red under
Bush. Here's how it happened: You can think of that
roughly $2 trillion swing as coming from four broad categories: the business
cycle, President George W. Bush’s policies, policies from the
Bush years that are scheduled to expire but that Mr. Obama has chosen to extend,
and new policies proposed by Mr. Obama. Let's break it down. The biggest chunk is the business
cycle. It accounts for 37 percent of
the $2 trillion swing. The 2001 and
current recessions reduced tax revenues, while at the same time, more spending
on safety net programs was needed to take care of people hurt by the poor
economy. And remember, we can pin
the current recession and its part of this chunk of the swing, to the right-wing
policies that caused this Great Recession. See
podcast 149
for more on that. The next biggest chunk, almost as
much, is 33 per cent attributable to new laws enacted under George W. Bush.
That would largely be, his tax cuts, and the Medicare prescription drug
plan. Ok, accounting for 20% of the swing,
is Obama's extension of several Bush policies:
the Iraq War and tax cuts for households making less than $250,000 a
year. You with me so far?
Get a load of this: 37 plus 33 plus 20 percent adds up to
what? 90%.
90% of the cause of the budget turning from an $800 billion dollar
surplus to a $1.2 trillion deficit, Obama either had nothing to do with, or was
simply allowing Bush policies to continue. Of the remainder, 7% comes from
Obama's stimulus bill. And the final whopping 3% -- 3, as in
one, two, three -- only 3% of the budget disaster is attributable to Obama's
legislative agenda. It's virtually
all caused by Bush and right-wing policies. So it's insane -- in other words,
standard right-wing practice -- to attribute the ballooning budget deficits to
Obama. And it gets still worse.
It doesn't just go back to Bush. Let's now get into the national debt
issue. Remember, that's the sum
total of all the borrowing done in prior years by the federal government, to
cover annual budget deficits. Here's, briefly, what Texas GOP'er Jeb
Hensarling asked Obama: audio: Rep. Hensarling You are soon to submit a new budget, Mr. President.
Will that new budget, like your old budget, triple the national debt and
continue to take us down the path of increasing the cost of government to almost
25 percent of our economy? That's the question, Mr. President. Here's Obama's reply: audio: Barack Obama What is true is, we came
in with $8 trillion worth of debt over the next decade. Had nothing to do with
anything that we had done. 4:00 It had to do with the fact that in 2000, when
there was a budget surplus of $200 billion, you had a Republican administration
and a Republican Congress, and we had two tax cuts that weren't paid for, you
had a prescription drug plan -- the biggest entitlement plan, by the way, in
several decades -- that was passed, without it being paid for, you had two wars
that were done through supplementals, and then you had $3 trillion projected
because of the lost revenue of this recession. That's $8 trillion. Now,
we increased it by $1 trillion because of the spending that we had to make on
the stimulus. I am happy to have any
independent factchecker out there take a look at your presentation versus mine
in terms of the accuracy of what I just said. Here's where we go further back than
George W. and Bill Clinton. Let's
see where all of that $8 trillion dollar debt that Obama inherited came from. Of course, any sane person knows the
answer. Our $8 trillion national
debt must be the result of tax and spend Democrats screwing up our country with
their financially irresponsible, nanny state boondoggles.
Am I stating this accurately, Mr. and Ms. Right-Winger? Just to be sure this right-wing
article of faith is reality-based, why don't I take a peek at the numbers? I'm looking right now at the official
government stats, a chart
showing the national debt every year from the founding of our country until
the present. Back from year one, until Ronald
Reagan took office, the national debt totaled less than $1 trillion, less than a
thousand billion dollars. Then Reagan took office. Now I can't mention Ronald Reagan
without condemning him as a mass-murdering terrorist for forming the contra
counter-revolutionary army in Nicaragua. The
contras pillaged the countryside of that poor nation, killing tens of thousands
of innocent civilians. Also
out of respect for his victims, I'm also obligated to condemn Reagan for being a
racist, as evidenced by his opposing the both the Voting Rights Act and the
Civil Rights Act, supporting South African apartheid, and other steps he took,
all of which you can hear about in detail in podcast 159. Other than being a mass-murdering
terrorist and a racist, Reagan, that right-wing icon, must have been good for
something. I'm sure -- aren't you?
-- that the financially conservative, fiscally responsible Gipper must have cut
that near trillion dollar national debt he inherited, in half.
Why, Super-Ronald probably wiped the whole darn thing out! Let me just take a look at this chart
to confirm this… Uh, Houston, we seem to have a
problem. According to this chart, when Reagan
left office, the national debt was around $2 trillion.
It more than doubled under Reagan. There must be something wrong.
No, I'm looking at the numbers again. Reagan ran up more debt than all the
Presidents of our nation before him combined! Well, I'm sure our next President, a
wonderful right-winger named George H.W. Bush, fixed all that. What's the chart say? Uh-oh. The elder Bush inherited about a $2
trillion national debt from Reagan, and when Papa Bush left office, the debt was
around $3 trillion. Not good. So during Ronald Reagan and George
H.W. Bush's 12 years in office, they managed to more than triple the national
debt. Nice work, oh fiscally responsible
ones. Ok, we're up to three trillion.
Obama inherited 8. Where did
the other five come from? That liberal bum Bill Clinton, I'm
sure. Let me check. No, the national debt sort of stayed
the same from the beginning to the end of Clinton's presidency.
Let's see hear.
Yup, it was under none other than George W. that the national debt went
from the three and change trillion he inherited from Bill Clinton, to the 8
trillion he bequeathed to Obama. What this means is, that of the $8
trillion dollar national debt that Obama spoke of facing when he came into
office, $7 trillion of that $8 trillion was run up by Ronald Reagan, George H.W.
Bush and George W. Bush. Apparently the Three Stooges of
financial irresponsibility. An aside: You should know that there
are different ways to calculate the national debt, and then there's the date
issue, where the fiscal years that the numbers are based on, don't coincide with
the beginning and ending dates of terms of office.
But while the numbers may shift slightly depending on these variables,
the overall picture is the same. Ditto
if you adjust for inflation. These are historical facts,
indisputable! Truly I can say to you without
equivocation, the shoe of financial unrestraint is on the other foot, the
right-wing foot. If you have a good memory, you can
recall that Rep. Hensarling charged that Obama's budget would triple the
national debt in 10 years. Wrong,
but by one way of measuring,
it could approximately double. Again, much of this increase is from
Bush policies Obama is extending.
That, if anything, could form the
basis of a valid criticism of Obama. Alan Auerbach, an
economist at the University of California, Berkeley, and an author of a widely cited study on the dangers of the current deficits,
describes the situation like so: “Bush behaved incredibly irresponsibly for
eight years. On the one hand, it might seem unfair for people to blame Obama for
not fixing it. On the other hand, he’s not fixing it.”
“And,” he added,
“not fixing it is, in a sense, making it worse.” But that criticism better not come
from Republicans. Because
Republicans want to extend Bush's tax cuts for the richest Americans, which will
send the deficits and national debt even higher. The GOP also talks a good game about
the need for budget cuts to get our financial house in order.
But they never propose anything substantive.
They recently announced a plan calling for $75 billion a year in cuts.
But specified only where $5 billion of those cuts would come from.
The conservative Cato Institute concluded "The G.O.P. is not serious about cutting down
spending." Using these two facts as a
springboard, let's now expand the frame. As
I promised, into the moral realm. There are those like Thom Hartmann
who say this
Republican hypocrisy is all part of a larger strategy, dubbed the Two Santa
Clauses. Republicans will spend like
crazy, on the military and even including things that make voters like them,
like the Medicare prescription drug benefit.
Santa Claus number one. The Republicans will also cut
people's taxes. Santa Claus number
two. Republicans know this will bankrupt
government. And that's their goal. Starve the beast.
As right-wing strategy guru Grover Norquist infamously said
of government, his goal was to reduce it to the size
where I can drag it into the bathroom and drown it in the bathtub. This is the moral issue I promised
earlier. The right-wing deliberately
bankrupts the government. They spend
wildly and at the same time, slash taxes, especially for the rich, and severely
curtail government revenue. Both
yearly budget deficits and the cumulative national debt balloon.
And because the media are purposely deaf, dumb and blind, the right-wing
succeeds in painting the Democrats as the profligate spenders, the financially
irresponsible ones. The right gets
elected to office again and again based on this false reality that people
accept. If Democrats dare to raise taxes or
cut spending themselves, they risk alienating voters as anti-Santa Clauses. And here's the lynchpin of it all: A properly functioning democratically
elected government is the only organized force powerful enough to stand up to
the power of the ultra-wealthy and the transnational corporations. If that
government is crippled as a counter-force, as it swirls down Grover Norquist's
bathtub drain, the right can run amok. Health care?
We can't afford it. We need
to cut benefits. Same with the rest
of the social safety net. audio: Rush Limbaugh Roosevelt is dead.
His policies may live on, but we're in the process of doing something
about that as well. Haiti and other Third World
countries? We better continue to
economically exploit them and overthrow governments we don't like.
We need the financial control. Check
out podcasts 153
and 162
for more on this. Indeed, listener Andrea from Ohio
coincidentally with today's show -- she didn't know the topic or that I'd
highlight Jeb Hensarling -- Andrea sent me a link describing how Rep. Hensarling
has proposed
reducing Social Security benefits and privatizing Social Security as
budget-cutting measures. Another part of tearing up the social
safety net, that long-time right-wing goal.
Necessary, the right screams, because the government is broke.
Broke because of stuff the right did, but never mind, they'll take full
political advantage of that fact. And if Social Security is privatized,
those trillions will be sent over to Wall Street, for them to make humungous
profits on. Again, a moral outrage,
and in fact, a playing out of the prime right-wing directive: transfer wealth
from everyone else to the already rich. So the entire issue of budget
deficits and the national debt, is part and parcel of a larger screaming
life-and-death moral issue, the battle between the right and the left, between
the ultra-wealthy and everyone else, for what type of nation, and indeed world,
we are going to have. So, whenever your friendly local
right-winger even begins to start in on the deficit or the national debt (it
would be interesting to see if they even know the difference), as soon as they
start, cut them off and say the vast majority was run up under Reagan and Bush
Sr. and Jr. End of story.
And any further increases forecast are largely from Obama continuing W's
policies. And, you can add, right-wingers would
make the financial situation even worse with more tax cuts for millionaires and
billionaires! It's beyond me, it's really beyond
me, how the mainstream media can let any Republican even mention the word
deficit or national debt, without holding their feet to the fire on the GOP's
own prime, almost exclusive role in creating the problem.
And exploiting it to their own political and financial advantage.
To the detriment of most everyone else. You and I have to do the holding of
the right-wing feet to the fire. Get
the kindling ready, will you?
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