Running in the red: How the U.S., on the road to surplus, detoured to massive debt

[FreeStateDemocrat]

Source: Washington Post

By Lori Montgomery, Published: April 30

The nation’s unnerving descent into debt began a decade ago with a choice, not a crisis.
In January 2001, with the budget balanced and clear sailing ahead, the Congressional Budget Office forecast ever-larger annual surpluses indefinitely. The outlook was so rosy, the CBO said, that Washington would have enough money by the end of the decade to pay off everything it owed.

Voices of caution were swept aside in the rush to take advantage of the apparent bounty. Political leaders chose to cut taxes, jack up spending and, for the first time in U.S. history, wage two wars solely with borrowed funds. “In the end, the floodgates opened,” said former senator Pete Domenici (R-N.M.), who chaired the Senate Budget Committee when the first tax-cut bill hit Capitol Hill in early 2001.

Now, instead of tending a nest egg of more than $2 trillion, the federal government expects to owe more than $10 trillion to outside investors by the end of this year. The national debt is larger, as a percentage of the economy, than at any time in U.S. history except for the period shortly after World War II.

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The biggest culprit, by far, has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. Together, the economy and the tax bills enacted under former president George W. Bush, and to a lesser extent by President Obama, wiped out $6.3 trillion in anticipated revenue. That’s nearly half of the $12.7 trillion swing from projected surpluses to real debt. Federal tax collections now stand at their lowest level as a percentage of the economy in 60 years. Big-ticket spending initiated by the Bush administration accounts for 12 percent of the shift. The Iraq and Afghanistan wars have added $1.3 trillion in new borrowing. A new prescription drug benefit for Medicare recipients contributed another $272 billion. The Troubled Assets Relief Program bank bailout, which infuriated voters and led to the defeat of several legislators in 2010, added just $16 billion — and TARP may eventually cost nothing as financial institutions repay the Treasury.




Read more: http://www.washingtonpost.com/business/economy/running-in-the-red-how-the-us-on-the-road-to-surplus-detoured-to-massive-debt/2011/04/28/AFFU7rNF_story.html?hpid=z2

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Imagine that, it ain't "entitlements," it is TAX CUTS and unnecessary WARS the legacy of the IDIOT that apparently all foreseeable generations will be fucked due the stupidity of the Supreme Court for selecting him and the American voting public for endorsing the abomination four years later. Also, some blame and shame should be shared by the DINO Party.Inc for perpetuating the tax give away to the rich and corporate American and continuing and even broadening WAR au go go. The poor and the working class will be driven deep into the ground and millions of lives will be wrecked with BO saying how sorry he is but unemployment compensation will continue thanks to his astute bartering. Toss us a bone while they eat out our hearts. Got any dreams we want them too.

[jpak]

1. K&R How repugs get to rewrite history is mindboggling

They were the ones that destroyed our economy and gave us this crushing debt

Fuck 'em

yup

[msongs]

2. and how democratic presidents and congresses go along with it is practically criminal nt

[AmandaRuth]

3. scanned the article very quickly (I have to go to work)

and what I didn't see was the fact that this was all planned, by the far-right (drown it in a bathtub, yadda yadda) as a way to eliminate and/or privatize SS and medicare, as well as to eliminate most fed agencies, ie environmental, education.

Certainly, the first paragraph, were it states that the public believes that cutting entitlement programs is the only way to solvency shows you how effective the constant barrage of propaganda from right wing think tanks filtered through their bought and paid for media has been.