PDF of this report (10pp.) By Kathy Ruffing and James R. Horney Updated June 28, 2010 Related Areas of Research Budget — Federal Deficits and Projections Recession and Recovery Special Series: Economic Recovery Watch Tax — Federal 2001/2003 Tax Cuts Taxes and the Economy Some critics continue to assert that President George W. Bush’s policies bear little responsibility for the deficits the nation faces over the coming decade — that, instead, the new policies of President Barack Obama and the 111th Congress are to blame. Most recently, a Heritage Foundation paper downplayed the role of Bush-era policies (for more on that paper, see p. 4). Nevertheless, the fact remains: Together with the economic downturn, the Bush tax cuts and the wars in Afghanistan and Iraq explain virtually the entire deficit over the next ten years (see Figure 1). The deficit for fiscal year 2009 was $1.4 trillion and, at nearly 10 percent of Gross Domestic Product (GDP), was the largest deficit relative to the size of the economy since the end of World War II. If current policies are continued without changes, deficits will likely approach those figures in 2010 and remain near $1 trillion a year for the next decade. The events and policies that have pushed deficits to these high levels in the near term, however, were largely outside the new Administration’s control. If not for the tax cuts enacted during the presidency of George W. Bush that Congress did not pay for, the cost of the wars in Iraq and Afghanistan that were initiated during that period, and the effects of the worst economic slump since the Great Depression (including the cost of steps necessary to combat it), we would not be facing these huge deficits in the near term. While President Obama inherited a dismal fiscal legacy, that does not diminish his responsibility to propose policies to address our fiscal imbalance and put the weight of his office behind them. Although policymakers should not tighten fiscal policy in the near term while the economy remains fragile, they and the nation at large must come to grips with the nation’s long-term deficit problem. But we should not mistake the causes of our predicament. Recession Caused Sharp Deterioration in Budget Outlook Whoever won the presidency in 2008 was going to face a grim fiscal situation, a fact already well known as the presidential campaign got underway. The Congressional Budget Office (CBO) presented a sobering outlook in its 2008 summer update,[1] and during the autumn, the news got relentlessly worse. Fannie Mae and Freddie Mac, the two government-sponsored enterprises (GSEs) that became embroiled in the housing meltdown, failed in early September; two big financial firms — AIG and Lehman Brothers — collapsed soon thereafter; and others teetered. In December 2008, the National Bureau of Economic Research confirmed that the nation was in recession and pegged the starting date as December 2007. By the time CBO issued its new projections on January 7, 2009 — two weeks before Inauguration Day — it had already put the 2009 deficit at well over $1 trillion.[2] The recession battered the budget, driving down tax revenues and swelling outlays for unemployment insurance, food stamps, and other safety-net programs.[3] Using CBO’s August 2008 projections as a benchmark, we calculate that the changed economic outlook accounts for over $400 billion of the deficit each year in 2009 through 2011 and slightly smaller amounts in subsequent years. Those effects persist; even in 2018, the deterioration in the economy since the summer of 2008 will account for over $250 billion in added deficits, much of it in the form of additional debt-service costs. Financial Rescues, Stimulus Add to Deficits in Near Term The government put Fannie Mae and Freddie Mac into conservatorship in September 2008.[4] In October of that year, the Bush Administration and Congress enacted a rescue package to stabilize the financial system by creating the Troubled Assets Relief Program (TARP). Together, TARP and the GSEs accounted for $245 billion (including extra debt-service costs) of fiscal 2009’s record deficit. Their contribution then fades quickly (see Figure 1). In February 2009, the new Obama Administration and Congress enacted a major package — the American Recovery and Reinvestment Act (ARRA) — to arrest the economy’s plunge. Mainstream economists overwhelmingly argued that, to combat the recession, the federal government should loosen its purse strings temporarily to spur demand, with a mix of assistance to the unemployed, aid to strapped state and local governments, tax cuts, spending on infrastructure, and other measures. By design, this package added to the deficit. Since then, policymakers have enacted several smaller measures to spur recovery and aid the unemployed. By our reckoning, the combination of ARRA and these other measur cbpp.org/cms/index.cfm?fa=view&id=3036 ### 젭 부시 . 니 형이 저질른 일을봐. 심장뛰고 경악스러운 통계.데이타베이스.봐봐. 거의 조지부시형은 .미친거였어. 전쟁광이였고. 그래.이렇게 나라가 완전히 파탄나고 .금융위기가 탄생했다. 그리고 시간이흘러 오바마대통령이 다시 재건하고있다. 조지부시가 저지른 저 엄청난 .적자를 보라. 미국이 존재하는게 신비롭다. 오 젭부시. 일말의 책임을지고 .반성하고. 몇십년대 유물이니 하면서 힐러리 클린턴을 비난하지마라. 젭 부시 이해했지.설마 이자료도 이해를 못한다면. 넌 힐러리 클린터의 상대가 아니야. Jeb Bush. You may take a look at the other, older brother. Heart beats astounding stats. database. look. It was almost crazy, prop. George Bush (1989-1993). Warmonger was. Yes this country completely collapse. the financial crisis was born. And this time, President Obama has been rebuilt again. George Bush did that enormous. the deficit. The United States is to present a mystery. Oh, Jeb Bush. Embrace responsible. Reflection. Only a few of the relics, while Hillary Clinton, do not blame. Jeb Bush did understand. you dont understand this tough material. Youre not an opponent of Hillary Rodham Clinton. ####
Posted on: Sun, 11 Jan 2015 17:31:30 +0000
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