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


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Your sources today include: the New York Times,, the Washington Post,,, the website of the Congressional Budget Office,,, and


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.


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.






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?




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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