George Bush The Liberal!

[Almighty Colin]

I don't think much blame or credit for the US' debt/budget can be given specifically to any party in specific years - and everyone is to blame on the long run. This exacerbates the problem when there is no specific accountability. If anyone can be blamed or credited equally - how will the budget get and stay balanced?

There is a system of checks and balances in the creation of the budget and it does take more than any one person or political party to do so.

Most people don't even seem to consider that when looking at short time periods, the strength of the economy is a huge factor in that year's debt. I won't say surplus because I don't think we've had one in 50 years. If you look at any particular year's deficit, you are looking at the planning of the congress/house/president combined with what tax receipts turn out to be - which is largely influenced by economic conditions.

I think it should also be remembered that there was almost a trillion dollar debt by the time Reagan took office. In the 5 years before Reagan took office, the debt was increasing at
about 10% per year. During Reagan's term the debt increased about 13.5% per year. The magnitude of the debt looks like it explodes in 1980 because it crosses $1 trillion for the first time (would have no matter who was in office) - and because that 10-13% increase is a higher actual dollar value every year compared to the year previously.

If the recent historical trend had continued the debt at the end of Reagan's term would have been about $2.1 trillion instead of $2.6 trillion. The point is that the debt was exploding before Reagan took office. The first time after the 1950's that the debt ever increased by more than 10% in a year was 1975. That continued in 1976 and 1977.

The increase in the federal debt began to increase at a slower rate beginning in 1991. You can see that here:

Increase in US Debt
1991 13.3%
1992 10.8%
1993 8.5%
1994 6.4%
1995 6.0%
1996 5.0%
1997 3.6%
1998 2.0%
1999 2.4%
2000 .3%
2001 2.3%
2002 7.2%

Why is the US debt increasing at a faster rate again? Tax receipts declined 6.6% the past year.
Some of that was from was the tax cut. More of it was from the stock market declines decreasing capital gains receipts. If the market didn't decline we would have probably been around 2% again.



Last edited by Colin at Dec 12 2002, 06:58 AM