Politics: Bush policies eviscerated, so the budget is balanced now, right?
Published by: Dan Calabrese on Wednesday January 2nd, 2013
By DAN CALABRESE - Follow the logic.
If I'm understanding the Obama narrative correctly, yesterday's fiscal cliff deal must have balanced the budget. Immediately. Follow it with me.
George W. Bush inherited a surplus from Bill Clinton, but he squandered it by cutting taxes and starting two wars without "paying for them." Yeah. We've been hearing this for years. We know it by heart.
OK. Let's forget for a moment that when Democrats controlled both Congress and the White House in 2009, they did not raise the Bush tax rates. Never mind that. Thanks to yesterday's fiscal cliff deal, all Bush tax rates except those for the vaunted middle class have now been returned to the Clinton-era levels, plus the estate tax is returning to 40 percent and capital gains taxes are being raised to 20 percent (23.8 percent for some).
So all Bush-era tax rates except the ones Obama himself said shouldn't be raised have now been raised. So that supposed deficit cause is now gone.
What about the wars? The Iraq War has been over since 2011, and we're drawing down to a complete withdrawal from Afghanistan in 2014. We're still spending $132 billion a year on Afghanistan, so let's spot Obama that. But shouldn't that mean that excepting for that $132 billion, which will go away next year, the budget should now be balanced?
Granted, the Bush tax rates are remaining in effect for the middle class, but that shouldn't matter because Obama keeps telling us the problem is that the rich aren't paying their fair share. Not only that, but his constantly repeated proposal to solve the problem is to raise taxes on the rich. Check. Taxes have now been raised on the rich.
So, where's that balanced budget? What? There's no balanced budget? What? We're probably still looking at a deficit in excess of $1 trillion? What? There are no spending cuts at all in the fiscal cliff deal?
Hmm. This is weird. Something's not adding up here. Gosh, you don't think it might have something to do with the following two factors, do you?
1. Obama blew up federal spending in 2009 by shoving his $862 billion "stimulus" through Congress, then quietly added all of it to the baseline for future budgets while the media let him get away with pretending it was a one-time "emergency" measure.
2. Real economic growth during Obama's presidency has been below 2 percent, which depresses federal revenue and makes it impossible to get anywhere near a balanced budget, especially with the profligate spending we've seen the past four years.
Fun fact: The deficit in 2007, which was the last budget passed by a Republican Congress and a Republican president, was $158 billion.