Seems like it's time for some fun with facts: deficit edition! First, take a look at Obama's speech about the Bush Tax Cuts from earlier this week, in which he gives his predictable class-warfare spiel about how the wealthy need to pay more in taxes (notably -- mercifully -- he left out that God-awful phrse "fair share"). In this excerpt, Obama is speaking about how tax cuts for the rich ruined the economy and caused mass deficit increases:
And what happened? The wealthy got wealthier, but most Americans struggled. Instead of creating more jobs, we had the slowest job growth in half a century. Instead of widespread prosperity, the typical family saw its income fall. And in just a few years, we went from record surpluses under Bill Clinton to record deficits that we are now still struggling to pay off today.
So we don’t need more top-down economics. We’ve tried that theory. We’ve seen what happens. We can’t afford to go back to it. We need policies that grow and strengthen the middle class -- policies that help create jobs, that make education and training more affordable, that encourage businesses to start up and create jobs right here in the United States.
So that’s why I believe it’s time to let the tax cuts for the wealthiest Americans -- folks like myself -- to expire. (Applause.) And, by the way, I might feel differently -- because it’s not like I like to pay taxes -- (laughter) -- I might feel differently if we were still in surplus. But we’ve got this huge deficit, and everybody agrees that we need to do something about these deficits and these debts. So the money we’re spending on these tax cuts for the wealthy is a major driver of our deficit, a major contributor to our deficit, costing us a trillion dollars over the next decade.
So there he goes, once more foisting the blame on W for the staggering deficits we're currently staring at, and attributing their rise to tax cuts on the highest earners. But is that accurate? Well, as you may have guessed, we wouldn't be here in this post if it were.
James K. Glassman over at Forbes finally became so tired of the left's rhetoric about the historic deficits W created for us that he decided to do a little experiment, and figure out who, of the recent administrations, had the largest deficit-to-GDP ratio. See his results below:
I decided to use three sets of calculations for each president: first, the deficit-to-GDP ratio from the fiscal year he took office to the fiscal year he left minus one (thus, for Reagan: 1981-88); second, from his first fiscal year plus one to the fiscal year he left (thus, 1982-89); and third, an average of the first two
Here are the ratios of deficit to GDP for the past five presidents:
1981-88 4.2 %
George H. W. Bush
George W. Bush
*fiscal 2012 ends Sept. 30, 2012, so this figure is estimated
Source: Economic Report of the President, February 2012
The results for President Bush are skewed by the 10.1 percent deficit/GDP ratio in fiscal 2009. A large chunk of spending in that year went to the Troubled Asset Relief Program, or TARP. In fiscal 2009, TARP contributed $151 billion to the budget deficit, but in 2010 and 2011, $147 billion of that amount was recouped and thus reduced the size of the deficit during President Obama’s watch. (These calculations are complicated and are laid out by the Office of Management and Budget. See http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/spec.pdf, p. 49.)
So in the three-and-a-half short years this president has held the office, the deficit-to-GDP ratio has soared. And yet, here he is, telling us that the Bush Tax Cuts caused them, and that the only way to undo the deficit is to undo them now. Of course, the idea that the government will use all the funds collected from the proposed tax increase on decreasing the deficit -- much less that this will actually make a sizeable dent in it -- is somewhat laughable.
For an idea of how much money this will end up bringing in:
Out of 119 million U.S. households, just 2.5 million -- or 2 percent -- reported making at least $250,000 in 2010, according to Census Bureau figures.
An estimated 940,000 taxpayers reporting business earnings will earn enough money to see their tax rates rise in 2013 unless lawmakers act, according to Congress' nonpartisan Joint Committee on Taxation.
That is just 3.5 percent of taxpayers reporting business earnings -- a figure Democrats use to show how few businesses would pay higher tax rates under Obama's plan.
The committee also estimated that those 940,000 taxpayers will account for 53 percent of the $1.3 trillion in business earnings reported in 2013 -- a number Republicans cite to argue that the higher rates will hurt the economy and job creation.
So that's great: let's tax the people who are most responsible for any of the hiring that's been done in our sluggish economy, while our deficit-to-GDP ratio is double what it's ever been in recent years. Obama's going to have to come up with something better than that -- but first, he'll have to admit the damage he's done to the country's economic standing.