Wednesday, June 10, 2009

Bush's Deficit, Obama's Problem

A New York Times article today shows that no matter what Republicans may be claiming now, the exploding budget deficit can still be laid squarely at the feet of former President Bush:
The story of today’s deficits starts in January 2001, as President Bill Clinton was leaving office. The Congressional Budget Office estimated then that the government would run an average annual surplus of more than $800 billion a year from 2009 to 2012. Today, the government is expected to run a $1.2 trillion annual deficit in those years.

You can think of that roughly $2 trillion swing as coming from four broad categories: the business cycle, President George W. Bush’s policies, policies from the Bush years that are scheduled to expire but that Mr. Obama has chosen to extend, and new policies proposed by Mr. Obama.
Obama's stimulus package is responsible for only 7% of that swing, his spending proposals on items like healthcare and the environment another 3%. The rest of it is the result of policies hatched by Bush and an economic downturn largely caused by Bush.

Nevertheless, it is now Obama's problem and as the article points out he hasn't really started to address it yet. Nor have the Republicans whose own suggested fixes would only make the deficit worse.

Any solution is almost certainly going to include reigning-in entitlements - my entitlements, as a 50-year old baby-boomer who knows that his retirement benefits are going to need to take a hit. Thank God for my Church of the Brethren pension! That was a joke, son.

But I also hope that part of the solution to the deficit problem comes in the form of a significant gasoline tax. A big gas tax would not only help pay for the deficit but it would also make a dent in the global warming crisis. And, I can't imagine the bailouts of Chrysler and GM and their forced retooling to make smaller, more fuel-efficient cars making any sense unless gas prices are a lot higher. Who is going to buy these small cars if gas is cheap? I would imagine that $5 a gallon is going to need to be the floor to get us to the kind of psychological shift that really changes driving and buying habits. We are going to need a gas tax to get us there.

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