When you elect a guy who really only wanted to be a cowboy as President of the United States, you have a big problem. Because…who follows cowboys?
And who follows after cattle? Well, more cattle, of course. And then you can imagine people who want to trail along behind the herd. They don’t go there without a good pair of boots. No one follows cattle barefoot.
Because you step in a lot of stuff that you’d rather avoid.
Republicans have veered so far off course to avoid stepping in anything that they have begun to follow some of the mavericks. Not Sarah Palin. She’d have to look up “maverick” in a dictionary to find one–if she owns a dictionary. But Texans know exactly what a maverick is…a pain in the ass if you’re trying to herd cattle.
In 1981, a truly different, unorthodox type of Republican took over in the White House. Ronald Reagan was as different from Dwight Eisenhower and Robert Taft and Dick Nixon as North Dakota is from California. He was a true maverick and unfortunately he lead the entire Republican herd off a cliff and the American People with them.
He said he would cut taxes in half and that it would stimulate the economy. He did and it didn’t. And now we’re almost $14 trillion in debt. Here are the facts.
When Ronald Reagan came into office, the country was running deficits, as it had for sometime. We had the Viet Nam war and other issues that were being paid off. But the deficit was running about 60 billion dollars a year. The total debt was about $800 billion, which many people thought was already a great deal of debt to be carrying.
But Ronald Reagan, maverick, had been persuaded that by Consrvatives and by GE, who paid his mortgage, that by cutting taxes he could expand the economy. So he cut taxes on all incomes. Starting with the top income category, he cut taxes from 74% down to 50%, then later he cut the 50% to 28% and it was eventually raised to 35%. So he cut taxes in half but not government. In fact, he expanded the military to four times its size.
The result was a doubling of the deficit to $120 billion in 1982, a tripling to $208 billion in 1983, to $185 in 1984, $221 in 1985, $237 in 1986, $169 in 1987, and $193 in 1988. During Reagan’s presidency, the budget deficits went up by $2.13 trillion bringing the total deficit to well over $3 trillion. But that wasn’t all of it. He also borrowed another $85 billion from the Social Security “trust fund,” thus running the total debt up close to $4 trillion.
George Bush the First (the one who did not go AWOL from military service but was, in fact, a legit WWII hero.) walked into an economic buzz saw in 1989. Reagan’s policies had caused serious damage to the economy and what Bush had called “voodoo economics” was coming home to roost…on his unsuspecting head.
In 1989, he saw deficits of $205 billion, in 1990, $277 billion, in 1991, $321 billion and in 1992, $340 billion. He raised taxes during that period but it was not enough to slow the process. So his tenure saw another $1.14 trillion added to the national debt, bringing it to $4.07 trillion, but if you added all the Social Security that they borrowed, it came to $4.2 trillion by the time that Bill Clinton walked through the door.
Bill Clinton added $300 billion to the deficit in 1993, $258 in 1994, $226 in 1995, $174 in 1996, $103 in 1997 and $29 billion in 1998. In 1999, he had a surplus of $1.8 billion and in 2000 a surplus of $86 billion. The total cumulative deficit under Bill Clinton was almost exactly $1 trillion dollars, with another $300 billion borrowed from Social Security. It brought the national debt to $5 trillion, or with Social Security borrowing again, to about $5.3 trillion.
The first year that the cowboy was in office, the national debt was $33 billion. And the Social Security surplus was $160 billion. But George W. Bush and Dick Cheney quickly saw to it that Americans would not have financial security…or any kind of security…for long.
In 2002 the deficit ballooned to $317 billion. In 2003, it was a staggering $536 billion, in 2004 it grew by another $150 billion to $674 billion, in 2005 it was $542 billion, 2006, $469 billion, 2007, $465 billion and in 2008, $486 billion. But we know what happened in 2008.
In the fall of 2008, Bush and Cheney and Treasury Secretary Paulson told Congress that unless they authorized an additional $700 billion, the financial system would literally shut down and the country would go into a Depression. By this time, by the Fall of 2008, we were losing jobs at the rate of 500,000 per month (!) and the rate of unemployment was accelerating.
In 2008, the country spent an additional $800 trillion dollars to bail out the banks. It worked to stop the financial panic. But job loss continued to climb to a peak of 700,000 in January of 2009, Obama’s first month in office. A quick stimulus plan was introduced in March and by the Fall of 2009, unemployment had stabilized close to 10%, with another 5% hanging on to part-time and scattered retail and other jobs.
So Bush added another $4. trillion to the debt. Of course, if one takes into consideration the Social Security that was “borrowed,” he actually added $5.3 trillion to the debt. So, theoretically, the debt should stand at about $10.6 trillion, including the borrowed Social Security, if you round off the numbers. But others say it is more.
For example, as of early 2009, CBS reported that the national debt had run over $11 trillion, and creditd Junior Bush with adding $4.9 of that debt. That could be right, although it is pretty clear that he is responsible for probably another $500 billion, so our numbers are probably more accurate. And of course he gave us the gifts that keep on giving…a huge Recession, two wars and bankrupting tax cuts that Neocons blackmailed the President into renewing.
There are arguments that “Obama added more debt than…all the other…whatevers”…since he has been in office. Here are the facts. From the Fall of 2008, when Bush was President and the stock market crashed, until October of 2009, the economy took a $1.8 trillion hit. That was because of the stimulus, and the cost of both the loss of tax revenues, the loss of income from businesses shutting down temporarily and from the costs of those laid off workers in unemployment and welfare.
We know that this loss of tax revenue plus the cost of laid off worker benefits ran to around $700 billion in 2009, and it did again in 2010.
The stimulus was about $800 billion. But about one-third of the stimulus was made up of useless tax cuts at the insistence of the Republicans or they said they would vote it down or filibuster it in the Senate. We know that the average Bush deficit was $450 billion, so adding that to the stimulus and the recession costs mentioned, that gives you the $1,8 or $1.9 trillion added in 2009.
Now…there are numbers that don’t always add up when you get to figures this large. We have gond strictly from the Treasury’s historical data of what revenues came in, what went out and the difference, which is usually a deficit. And we added those up, year by year. But the Treasury Department says that the deficit was actually $11.9 trillion by October 2009, the end of Obama’s first year. If you add that $1.9 that we just mentioned, to $11.9 trillion, you get, plus or minus a few bucks, the estimated $13.5 trillion national debt right now, heading for $14 trillion.
So how do we get out of this mess? We grow our way out of it. Clinton was successful because there was an explosion of new high tech companies that expanded the economy and tax revenues grew exponentially. He created 22 million new jobs…the economy did…and so people were not only at work but the country benefited.
It does not take a genius to see that what we need now is to get people back to work. Two hundred billion dollars will create 5 million good-paying jobs and earn back $100 billion in tax revenues from those people and the people who expand their small businesses to serve them. So the net cost of $100 billion will begin to build the economy. The second year the cost will only be $50 billion, and the revenues jump up to as much or more than $150 billion, plus other indirect costs as a result of unemployment will be greatly reduced. Non-government jobs will expand, simply because, even before the Recession, the service economy was a staggering 80.6% of GDP.
As government jobs and capital funding grows for state and municipal projects, it will begin to make both good employees and the best capital investment opportunities more scarce. This causes growth in the private economy which now sits on the sidelines. They cannot wait for the best investment opportunities to go elsewhere. For them, greed is not just good, greed is everything.
Why doesn’t government do something like this? The President has tried but has been blocked in Congress by filibusters. Right Wing organizations, like the health insurance lobby and anti-regulation lobbyists for international corporations and energy (oil and natural gas) companies are fighting for their issues.
The Neocons are focused on defeating the President to stop health care reform and regulatory reform both of which Obama accomplished. These pieces of legislation will cost them hundreds of billions of dollars which they will not be able to pass on. So, right now, they are working at cross purposes with the huge number of Americans unemployed and underemployed. Democrats want jobs. Republicans don’t want them to get credit.
The only way you beat the Neocons and help the people you undoubtedly know who are unemployed or need health care without being dropped or charged outrageous amounts, or for yourself, is to join in with Democratic clubs, Progressive organizations and march, write, talk, act…show the power of the People. Ultimately the will of the People is what counts.