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NYT: Are the Bush Tax Cuts the Root of Our Fiscal Problem?
This graphic doesn't mention of the defense spending under Obama - not only the increase in Afghanistan and excursion into Libya, but non-war-related defense increases as well. (Clinton, in contrast, did keep defense spending down, so the omission of defense in the summary is objectively reasonable.)
The graph below, sourced ultimately from DoD, is in constant dollars.
Reply to @msf: The Obama part of the graph does show too high spending but it is slightly less than what was being spent when he took office. The gray areas make one fail to notice this until one looks closely at the colors on the line to see the actual budgets of the Presidents. The daddy (HW) Bush budgets (89-93) are interesting in contrast. It appears to have taken years to bring it down to the bottom during the daddy Bush and Clinton days and no wars like Vietnam, Afganistan and Iraq were in progress.
Reply to @Anna: "The Obama part of the graph does show too high spending ..." You can stop there, for you've validated my point. The NYTimes graphic does not include this "too high spending" as a major factor in deficits during Obama's administration. That's the fault I was pointing out in the graphic.
Since I'm not sure what point you're trying to make - a slight drop in inflation-adjusted defense spending doesn't make a dent in the deficit (the subject of this thread) - I'm not sure how to respond. I will simply provide this additional factoid (addressing the single datum of FY12 spending, which is in any case a projection) - "Adjusted for inflation, the level of funding proposed for the base defense budget in the FY 2012 request is the highest since WW2, surpassing the Cold War peak of $531 billion (in FY 2012 dollars) reached in FY 1985." Business Insider July 19, 2011.
Reply to @Investor: Hi Investor- hope that you are feeling better. Thanks for the graphic... just emailed it to one of my more intransigent Republican friends, in a (probably futile) attempt to ruin his morning. OJ
But, what is important to remember in conversations about the base budget is that it may not include much of the war costs (this century). I thought Obama was now putting this on budget but it is not clear in the report that this has occurred. Also, it appears that this budget includes things like Veterans benefits which have been increasing. The defense budget is complex to say the least. As a percent of the budget, the numbers given for Libya do not look big (thus far).
I wasn't making a point, I guess. I was just reporting an observation as I had initially glanced quickly at the graph and had to go back and study it more. I thought others might do the same.
What is funny is that the Business Insider link itself where I found the full report link concludes: "Together, these three metrics indicate that defense spending is at a high level by historical standards but is affordable given the size of the U.S. economy and is consistent with modern-day norms as a portion of overall federal spending." They compare to WWII GDP and total spending request and I personally don't think either of these comparisons does anything useful. It is less that WWII as a percent of GDP - so what? It is less as a percent of spending - good grief!
Apparently, in 2011 it fell a little (about 1%) because the budget wasn't passed and the requested increases didn't take place. The new numbers are the 2012 request which asks for a 3% increase. I expect if they can't pass the debt ceiling, the 2012 budget will end up being a continuing resolution again leading to less of an increase (base).
Makes me wonder though - which is worse, reducing the defense budget and "not supporting the troops" or reducing the Medicare budget and "killing granny". Politics today is a series of dynamite one liner risks. No one is (or can be) serious, I guess.
It's been a trend but both of these situations greatly highlighted the problem.
Folks, it's still the Unfunded Liabilities and the nature of the politikal beast. You make lots of promises with no possibility of paying for them and as long as someone takes your paper you're cool.
The problem with the Bush Tax Cuts was that while much of them were warranted and good, they were too Supply Side and didn't do enough to stimulate consumption [read: they ignored Demand Side]. They needed more give back at the lower end of the income ladder where the Marginal Propensity to Consume is 100%. I don't care of CapEx is deductible and money is cheap - I'm not building another plant or adding a shift while my P&E is running at under 75% capacity.
As for the silly wars. We cannot afford to remain the World Policeman. It's bankrupted every country that ever tried and it will us. Bring all the troops home and defend the shores. You could cut 1/3 off Defense and at the same time improve the quality and technology of our military.
Eliminate ALL tax deduction and make the income tax Pay at the Window but at lower rates. Consider a VAT. Legalize Recreational Drugs and tax the living hell out of them while ending the War on Drugs.
Reply to @Maurice: If Bush did not cut first, there would be nothing that Obama would favor to renew. So, since the origin of these cuts are from Bush presidency, they are Bush tax cuts. If we allowed the Bush tax cuts to expire and replaced by some other scheme them they would be Obama tax cuts. In particular, Obama wanted tax cuts to expire for those making $250K or over and even showed leniency towards making that $1M. This is not his tax cuts.
Comments
The graph below, sourced ultimately from DoD, is in constant dollars.
Since I'm not sure what point you're trying to make - a slight drop in inflation-adjusted defense spending doesn't make a dent in the deficit (the subject of this thread) - I'm not sure how to respond. I will simply provide this additional factoid (addressing the single datum of FY12 spending, which is in any case a projection) - "Adjusted for inflation, the level of funding proposed for the base defense budget in the FY 2012 request is the highest since WW2, surpassing the Cold War peak of $531 billion (in FY 2012 dollars) reached in FY 1985." Business Insider July 19, 2011.
http://www.csbaonline.org/wp-content/uploads/2011/07/2011.07.16-FY-2012-Defense-Budget.pdf
But, what is important to remember in conversations about the base budget is that it may not include much of the war costs (this century). I thought Obama was now putting this on budget but it is not clear in the report that this has occurred. Also, it appears that this budget includes things like Veterans benefits which have been increasing. The defense budget is complex to say the least. As a percent of the budget, the numbers given for Libya do not look big (thus far).
I wasn't making a point, I guess. I was just reporting an observation as I had initially glanced quickly at the graph and had to go back and study it more. I thought others might do the same.
What is funny is that the Business Insider link itself where I found the full report link concludes: "Together, these three metrics indicate that defense spending is at a high level by historical standards but is affordable given the size of the U.S. economy and is consistent with modern-day norms as a portion of overall federal spending." They compare to WWII GDP and total spending request and I personally don't think either of these comparisons does anything useful. It is less that WWII as a percent of GDP - so what? It is less as a percent of spending - good grief!
Apparently, in 2011 it fell a little (about 1%) because the budget wasn't passed and the requested increases didn't take place. The new numbers are the 2012 request which asks for a 3% increase. I expect if they can't pass the debt ceiling, the 2012 budget will end up being a continuing resolution again leading to less of an increase (base).
Makes me wonder though - which is worse, reducing the defense budget and "not supporting the troops" or reducing the Medicare budget and "killing granny". Politics today is a series of dynamite one liner risks. No one is (or can be) serious, I guess.
It's been a trend but both of these situations greatly highlighted the problem.
Folks, it's still the Unfunded Liabilities and the nature of the politikal beast. You make lots of promises with no possibility of paying for them and as long as someone takes your paper you're cool.
The problem with the Bush Tax Cuts was that while much of them were warranted and good, they were too Supply Side and didn't do enough to stimulate consumption [read: they ignored Demand Side]. They needed more give back at the lower end of the income ladder where the Marginal Propensity to Consume is 100%. I don't care of CapEx is deductible and money is cheap - I'm not building another plant or adding a shift while my P&E is running at under 75% capacity.
As for the silly wars. We cannot afford to remain the World Policeman. It's bankrupted every country that ever tried and it will us. Bring all the troops home and defend the shores. You could cut 1/3 off Defense and at the same time improve the quality and technology of our military.
Eliminate ALL tax deduction and make the income tax Pay at the Window but at lower rates. Consider a VAT. Legalize Recreational Drugs and tax the living hell out of them while ending the War on Drugs.
And so it goes,
peace,
rono
Of course you know Joe, this comes from "the main stream media". You won't find this mentioned on Fox News!
Kidding of course... I also sent this to a few of my lean-to-the-right friends.