R i g h t a r d i a: Newsy.com: U.S. Deficit Increase Draws Controversy

Friday, August 28, 2009

Newsy.com: U.S. Deficit Increase Draws Controversy

The GOP has not balanced the budget since the era of Dwight Eisenhower. In 2002, Vice-President Dick Cheney and the Bush administration’s economic team met to discuss a second round of tax cuts.

At the meeting, “then-Treasury Secretary Paul H. O’Neill pleaded that the government — already running a $158 billion deficit. Allegedly, Cheney replied by saying that “deficits don’t matter.”

Six years later, the Bush administration’s consistent belief that deficits don’t matter has increased the national debt to more than $10 trillion. This is the highest dollar amount ever, and pushes the debt to 69% of the gross domestic product, which is the highest percentage since 1955.

Bush has presided over the largest increase in the debt of any president in history. When he took office, “the national debt stood at $5.727 trillion.” In eight years, there has been an increase of more than 70%.

On deficits, Roanld Reagan was another deficit buster. He nearly tripled the gap between the amount of money the federal government took in and the amount it spent. He did this by cutting tax rates by an average 25 percent, while aggressively increasing defense spending. Reagan's tax policies also fractured the middle class that has led to stagnant wages during big gains in worker productivity.

In 1981, shortly after taking office, Reagan lamented about "runaway deficits" that were then approaching $80 billion, or about 2.5 percent of gross domestic product. Within only two years, however, his policies had succeeded in enlarging the deficit to more than $200 billion, or 6 percent of GDP.

Most of the deficit and national debt problems were created by the GOP: a party that can win elections, but cannot govern. It is a party that is fueled by ideology rather than political pragmatism.

Trying to link the deficit and national debt to health care is ridiculous. Americans spend twice as much on health care as the other nations of the world and 20 per cent of Americans have no health care coverage. Once health care is reformed, the government will be able to cut medical spending.

Republicans have no credibility at all on the deficit. Most of their comments have been hypocritical.