Picture the US Deficit

From James Fallows' blog at The Atlantic, as they say... a picture is worth a thousand words:

Click to Enlarge
Why does this chart matter? Because it makes clear, in that wonderful "worth 1,000 words" way, two realities that are fundamental to sane discussion of public finance, but that most of the public doesn't realize and that the Republican leadership is actively working to obscure. They are:

- The very large, but temporary and self-limiting, expenditures for TARP and other measures proposed by both the Bush and Obama administrations to avoid a second Great Depression, plus Obama stimulus spending. And;

- The very large, but permanent and worsening, budgetary impact of the "Bush tax cuts" -- which when first proposed back in the pre-9/11 era, were supposed to end in 2010 and were in response to what back then seemed to be the "problem" of a burgeoning surplus in federal accounts! Since "extending" those cuts just sounds like business as usual, I think it is hard for most people to envision the profound and growing effect they have. The chart above helps toward that end -- and doesn't even go into how heavily those cuts are skewed to the "haves" of society. Last year Austan Goolsbee had a marvelous chart of his own on that point.

And, as a bonus half-point, the chart clarifies that budget problems would be on the path to self-correction, if the Bush cuts had lapsed as originally planned.

Go read the whole post, and especially look at the graph showing the effect of letting the Bush tax cuts expire.

Just which of the above can be attributed to the mismanagement of Bush and the Republicans?

• War in Iraq (a war of "choice" against a non-threat) sold as the threats of "weapons of mass destruction" and supposed "cooperation" between Saddam Hussein and al Qaeda.


• Bush era tax cuts (the anti-Robin Hood policy of the Republicans: take from the poor to give to the rich)


• Recovery measures (the right wing "deregulate, deregulate, deregulate" meant that an unregulated Wall Street and the banks could run the economy off a cliff with fradulent mortgages, fradulent ratings, and the bundling of junk into AAA-rated "securitized" investments)


• Economic downturn (ditto the above)


• TARP, Fannie, and Freddie (these are all sinkholes for taxpayer money because of the ideological "deregulate, deregulate, deregulate" that drove the economy over a cliff)

So... about 80% of the deficit is inherited from Bush and the quasi-criminal policies of the political right.