The Role that Bush-Era Tax and Spending Policies Play in the Deficit →
The Tax Foundation crunches the numbers to see if it’s true that “the economic downturn, President Bush's tax cuts and the wars in Afghanistan and Iraq explain virtually the entire deficit over the next ten years.”
1) Tax revenues have fluctuated largely with the economy, dropping precipitously in the aftermath of the 2008 recession, but are projected to remain close to historical norms with or without expiration of the Bush tax cuts in 2012.
2) Entitlement spending has roughly doubled in the last 40 years as a percentage of GDP and is projected to remain there through 2021, pushing total spending well above any historical precedent. Thus, the CBO projects deficits as far as the eye can see.
Should we blame Bush (or rather, all that happened during his presidency) for this? In a sense, yes, but not for the reason the CBPP would have us believe; the role of Bush-era policies in the projected deficits is mainly on the spending side of the equation, not the tax side.
We have a spending problem, not a revenue problem.
This entry was tagged. Fiscal Policy George Bush Spending Taxes