$8.5 Trillion In Borrowing Due to Bush Policies

The Citizens for Tax Justice has an interesting position paper on the outcomes of Bush’s policies.

These starting deficit figures differ markedly from the often-cited, but unrealistic “baseline” projections that CBO is legally required to produce—but which, as CBO points out, “are not intended to be predictions of future budgetary outcomes.” CBO outlines (and quantifies) several plausible adjustments:

  • Assume that spending on the war in Iraq will gradually wind down over the next several years (reducing the 2006–16 “baseline” deficit projections by $0.4 trillion).
  • Expect that other appropriations will keep up with the growth in the economy (adding $1.4 trillion to the deficit projections).
  • Measure the effects of extending expiring tax cuts, most notably the President’s tax reductions that are currently scheduled to expire after 2010 (adding $2.9 trillion to the deficit projections).

The resulting $8.5 trillion in projected borrowing reflects deficits in the regular federalbudget, including an expected $2.8 trillion to be borrowed from Social Security over the upcoming decade under the President’s policies.

Now part of that $8.5 trillion ($2.77 trillion in fact) is from counting money from the Social Security over collection. Counting that as a negative would have meant the Clinton didn’t run surpluses. Still, by spending that money now (i.e. investing the money in government bonds) means that that money will have to be raised in the future via taxes when the Social Security revenues go red.

Personally, I’d like to see big reductions in spending, not tax increases. Not that I expect this current generations of Republicans to actually pursue this kind of a policy. Nope, the Republicans seem to find that yummy salty pork quite tasty.

FILED UNDER: Economics and Business, US Politics, , , ,
Steve Verdon
About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research. He joined the staff at OTB in November 2004.

Comments

  1. none says:

    Interesting, when you consider the label that the democrats have gotten over the years: “Tax and Spend Liberals.” What should we call these guys, “Borrow and Spend conservatives?” At least with the democrats, they taxed us before spending. With this crew, not only do we owe the spent money but we also owe the interest. Thanks for nothing!

  2. Christopher says:

    It’s not Bush’s fault. With tax cuts he has produced record revenues, so it must be spending. And by far the biggest spending is entitlements, that liberals put in place but R’s are afraid to reduce or get rid of since they might be voted out.

    So what has Bush done? He tried to solve SS-liberals opposed him. He has cut entitlements recently-and the liberal media has called him heartless. (He proposed selling 14,000 acres of federal timberland in Oregon & Washington and the local news showed the famous Columbia Gorge in their news story implying that that was where he was selling it to be logged when it wasn’t true.)

    Blame LIBERALS for the fiscal MESS! Hopefully Bush gets some balls and proposes a balanced budget amendment calling NOT for more taxes when the budget doesn’t balance, but for CUTS in spending including e-n-t-i-t-l-e-m-e-n-t-s. Balanced budget next year. Problem solved.

  3. Steve Verdon says:

    ItÂ’s not BushÂ’s fault. With tax cuts he has produced record revenues, so it must be spending.

    Errr…what?

    And by far the biggest spending is entitlements, that liberals put in place but RÂ’s are afraid to reduce or get rid of since they might be voted out.

    Skroink! Did you miss the biggest increase in entitlement spending, Medicare Drug Program, that Bush pushed for? How about education?

    Blame LIBERALS for the fiscal MESS!

    I do, and the liberal is named George W. Bush.

  4. Hoodlumman says:

    James, while I agree that pols love their “yummy salty pork”, pork is just the tip of the iceberg.

  5. Christopher says:

    Yes, Steve, I do blame Bush for the Medicare Drug Program. Just like his Dad he thought it would appease the left and I hope he learned nothing he can do will.

    But…r u saying tax cuts did not produce record revenues??? They did! Look at the increase in revenues. HUGE! All starting after the tax cuts. If you can’t read that correlation (Republicans can…are the higher revenues just a coincidence? Huh? Huh?) then u r a moron. Tax CUTS spur investment which creates growth in the economy. Which then produces more revenue! Tell me…what do YOU think produces higher revenues?