The Congressional Budget Office in 2001 projected that the USA would pay off by 2008 its $3.4 billion national debt and that the nation would have a $2.3 trillion surplus by 2011. That is what would have happened had the 2000 policies been maintained.
Instead the national debt in 2011 stands at $10.4 trillion. What changes led to $2.3 trillion surplus becoming a $10.4 trillion debt?
A must read article in the Washington Post lays out the facts. Go to: http://www.washingtonpost.com/business/economy/from-surplus-to-debt/2011/04/30/AFeYNfNF_graphic.html.
Short summary is:
1. the 2001 and 2003 tax cuts created $1.7 trillion of debt;
2. new domestic spending $1.4 trillion;
3. IRAQ and Afghanistan wars that were not paid for added $1.3 trillion in debt;
4. Medicare Prescription Drug addition in 2006 also not paid for created $273 billion;
5. New defense spending (not the wars) added $663 billion;
6. 2009 Recovery Act added $719 billion;
7. December 2010 extension of 2001 and 2003 tax cuts added $391 billion;
8. Other tax cuts since 2000 added $678 billion.
9. Additional borrowing cost due to rising national debt added $1.4 trillion.
10. Tarp added just $16 billion;
11. Lost revenues due to recession and other technical changes added about $3 trillion.
All those tax cuts, military expenditures, additional domestic spending created debt but America has no more jobs than it had in 2000. America, however, does have close to 20 million more people to employ than in 2000.
"the 2001 and 2003 tax cuts created $1.7 trillion of debt"
ReplyDeleteNo, the tax cuts did not create additional debt. However, Congress and the Administrations refusal to reduce spending, did. A Government that continues to spend at the same level, when it knows that revenues are going to decrease is irresponsible, to be kind, or the Government staffers are just plain stupid.