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Who Ran Up The Debt Anyway?

As the debt ceiling non-debate continues, the Republicans repeatedly regurgitate their line about “President Obama’s deficit” and how he grew it by a trillion Dollars. They seem to have forgotten that he had to bail out the auto industry and pump money into the economy to try to get the nation out of the biggest recession since the Great Depression. A recession caused by lack of control of our key financial institutions, which had been largely deregulated by Republican administrations.

The most recent example that we’ve witnessed was by a Tea Party Senator who was being quizzed by an MSNBC anchorman yesterday evening. When confronted with the facts, the Tea Party Senator dodged the question, became confrontational and insisted on pushing his pre-scripted talking point about President Obama’s “excessive overspending”. As we shall see, he was very under-informed about the facts.

Let’s take a close look at the additional spending that occurred because of actions taken by President Bush and that is projected to occur as a result of President Obama’s actions. Here are the major items:

  1. President Bush spent almost $1.5 trillion on the Afghanistan and Iraq wars and didn’t count them as a part of his annual budgets. President Obama has shut down the Iraq War, but increased expenditures on the Afghanistan war and may spend around $700 million on the military action in Libya (which is about the cost of four days of the Afghanistan war effort).
  2. President Bush gave away over $1.8 trillion in tax cuts for the extremely rich and for corporations. President Obama spent $425 billion on stimulus tax cuts after the recession that the Bush administration caused. In other words, a more correct figure is $2.225 trillion in tax cuts as a result of President Bush’s mismanagement.
  3. Non-defense discretionary spending amounted to $608 billion under President Bush, more than twice the $278 billion that President Obama is expected to spend.
  4. President Bush spent a total of just under $1 trillion on bailouts and stimulus funding ($224 billion on TARP and $773 billion on the 2008 stimulus attempts). President Obama spent $711 on stimulus funding. Again, the true tally should be $224+773+711, i.e. $1.708 trillion as a result of Bush’s actions and zero as a result of President Obama’s policy changes.
  5. President Bush spent $180 billion on unfunded Medicare drug benefit changes that primarily put money into the hands of the Big Pharmas. President Obama spent $152 billion on health care reform and entitlement changes. Incidentally, the Republicans continually lie about the latter figure when they say that “Obamacare”, their deprecatory label for the health care reform bill, will cost $1 trillion. It won’t and they know it. If they were to repeal it the cost over ten years would be around $340 billion.

On paper, President Bush added a total of $5.07 trillion to the debt and President Obama will add $1.44 trillion. However, approximately $1.14 of the latter figure is as a result of President Bush’s mismanagement of the economy. In other words, the real numbers should be $6.21 trillion of additional spending by President Bush and only $0.3 trillion by President Obama. If you add in the $126 billion in savings that President Obama will make on defense spending, he will only be responsible for about $0.17 trillion of new spending, about 4% of what President Bush was responsible for. As the total national debt is around $14.7 trillion, President Bush singlehandedly created almost half of it!

Additional Spending As A Result Of Changes Made By Presidents Bush and Obama (Source: The Atlantic).

It’s no wonder that the Republicans don’t want to look back at the real reasons that we have to raise the debt ceiling. Let’s hope that President Obama and the Democrats can leverage the real facts in 2012.

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