Just last week Barack Obama addressed the nation and blamed wars, tax cuts and an expensive prescription drug program for the nation’s debt.
Barack Obama: “For the last decade, we’ve spent more money than we take in. In the year 2000, the government had a budget surplus. But instead of using it to pay off our debt, the money was spent on trillions of dollars in new tax cuts, while two wars and an expensive prescription drug program were simply added to our nation’s credit card.”
The wars and tax cuts were not responsible for the nation’s debt.
The Toronto Sun reported:
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How did the United States get into this debt mess?
President Obama blames both parties, and he’s right. But the real question isn’t who did it, it’s how. The answer is social programs.
America’s previous debt problems all came from major national emergencies, beginning with the Revolutionary War. The Civil War saw debt skyrocket from $65 million in 1860 to $2.5 billion in 1870; World War I from $2.6 billion in 1910 to $26 billion in 1920; World War II from $43 billion in 1940 to $257 billion in 1950. But when the clearly defined crisis ended, so did the extra spending, and the debt stabilized.
Even the Cold War produced little borrowing; 1960’s $290-billion debt was just 13% higher than in 1950. But then it exploded: $389 billion in 1970; $930 billion in 1980; $3.2 trillion in 1990; $5.7 trillion in 2000; and 2010’s $13.6 trillion.
Still, to say the debt is at record levels is not, by itself, to say much. Between economic growth and inflation, a debt that was horrifying in, for instance, 1840 would be laughable today. (Since you ask, it was $3.5 million.)
The best way to gauge the seriousness of government debt, though far from perfect, is by its share of GDP. That measure shows U.S. federal debt staying under 40% even in the Civil War and World War I, rising a bit above it in the Great Depression, spiking in World War II at over 110%, then falling steadily to under 30% by the early 1980s. Then it rebounded and, after a dip in the late 1990s, shot upward.
A “discourse” on the left blames it all on the right. The Toronto Star’s Heather Mallick just blamed this year’s $1.4 trillion deficit on “George W. Bush’s tax cuts and by Barack Obama’s continuing to wage two unwinnable, unaffordable wars and starting a third in Libya”. But it just ain’t so.
Tax cuts cannot be the culprit because the United States does not have a revenue problem. For six decades federal taxes took an average of just under 18% of GDP and, after a sharp recessionary dip, are heading back that way.
The U.S. has a spending problem. From an average of just over 18% of GDP from 1950 to 1974, federal spending rose to an average of 20.8% from 1975 to 2007 then shot up to over 25%. And not on wars: at $666.7 billion in 2010 (about 4.5% of GDP) the military budget is less than half the deficit. Moreover, defence’s share of GDP fell from nearly 15% in the early 1950s to under 10% by 1970 to under 5% by 2000 yet the budget was not on fire in the 1950s or even 1970s.
Of course, don’t hold your breath waiting for the rest of the democrat media complex to correct Obama’s false accusations.
It aint gonna happen.
UPDATE: Byron York notes how Obama partisans ignore facts.