Vote on debt ceiling must be tied to spending cuts
-Rep. Eric Cantor
Great, let’s start with the Defense Department… you know, the single largest discretionary item in the budget. You’ll quickly find that Republicans are full of crap when you discover them unwilling to include defense cuts in their plans. This, despite the fact that US defense spending accounts for 46.5% of the WORLD’s military spending. The US spends more on defense than the next 14 highest spenders combined!
Its not about the deficit. Its about killing social programs they don’t like (social security, medicare, medicaid). The deal that Dems had to cut with Reps on extending the Bush tax cuts actually increases the deficit. They don’t care about deficits, they encourage them. They use them to bolster an argument to cut government. Republicans have long run a "starve the beast" strategy when it comes to government. Cut taxes and run up deficits until the only discussion is what to cut, rather than what our spending priorities should be (because Dems always win that fight).
Generally speaking, its a bad idea to cut spending with a weak economy and high unemployment. In a poor economy, the budget should be in deficit (lower economic output means lower tax revenue). The problem being that for this to work you must also allow surpluses during booms (which are used to pay down debt; see Clinton).
Republicans abhor a federal budget surplus – they always demand it be returned to the people in the form of tax cuts (see Bush).
The truth of the matter is that spending isn’t out of control, it is a little high, but not much out of line with historical trend. Total spending is presently ~25% of GDP even though GDP is temporarily depressed being we are coming out of recession. For perspective, in 1983 it was ~23% of GDP. GDP represents the total value of economic output in the US, or in other words, you might think of it as our income as a nation. 25% of our national income goes to government. The average since World War II is ~18%. That’s not a spending crisis (see this chart, if necessary, select "Total Spending" from the category drop down: http://www.usgovernmentspending.com/downchart_gs.php?year=1900_2010&view=1&expand=&units=p&fy=fy11&chart=F0-fed&bar=0&stack=1&size=m&title=&state=US&color=c&local=s).
You should note that if GDP falls (as occurs in a recession), that the percentage will increase, even if spending remained the same. In our case, spending has risen AND GDP has fallen, and yet total spending as a percentage of GDP isn’t much out of line with historical spending. That’s a damn good hint that deficit isn’t the result of runaway spending.
The cause of the deficit, therefore, is that revenue is historically low. Federal revenue as a percent of GDP fell 10% from 2006 to 2009 (http://usgovernmentrevenue.com/downchart_gr.php?year=2000_2010&view=1&expand=&units=p&fy=fy11&chart=F0-total&bar=0&stack=1&size=m&title=Revenue As Percent Of GDP&state=US&color=c&local=s). Since a fall in GDP means a corresponding fall in revenue, that means its not just a failing economy that caused such low revenue. It’s largely the result of the Bush tax cuts. The cuts were back loaded – having their largest cuts in the final years, almost exclusively benefiting the wealthy.
Spending increases meanwhile have been mostly attributed to the social safety net, things like unemployment benefits; or a variety of stimulative spending in aid of local governments to keep teachers and police employed… but they pale in comparison to the scale of tax cuts over the last 10 years; on top of a poor performing economy.
In a twist of fate, Republicans will have to raise the debt ceiling despite being elected to put an end to deficit spending. The irony, is that it is their own irresponsible tax cuts that lacked any corresponding spending cuts that got us here.
Socrates Dissatisfied 