President Obama’s canned explanation for his enormous deficits is so ridiculous, so ludicrous, the so-called fact checkers of the establishment media would be spraying Pinocchios with a fire hose if he were a Republican. [Continued below the chart]
A genuine explanation for the deficits would have to include thousands of spending line items, with entitlements being the largest category. But instead of giving his audience real information, the President repeats the same laughably simplistic script at every campaign stop and in every media interview. He assures us that he did almost nothing to contribute to the record-shattering deficits during his first three years. He inherited deficits, he claims, from “a decade of Bush policies.” A typical example was his Sixty Minutes interview when he said the deficits were
…a consequence of two wars that weren’t paid for, as a consequence of tax cuts that weren’t paid for, a prescription drug plan that was not paid for…
But as the chart above shows, compared to the rest of the federal government’s programs the cost of the Iraq and Afghanistan wars and the Medicare Prescription Drug benefit that began in 2006 were tiny.
What does “not paid for” actually mean? The chart to the right shows government never collected less than ten times as much in tax revenue as it spent on the combined cost of the wars and the prescription drug benefit.
Of course there wasn’t enough tax revenue to pay for all government expenditures, resulting in deficits from 2002 on. But “not paid for” could be said of any of the thousands of budget line items.
By what criteria did Obama determine that these two expenses were the ones not paid for and that they cause the deficits even though they are but a tiny fraction of total spending? Why not blame ObamaCare or his $800 billion stimulus, or the Auto bailouts, or green energy subsidies, or Cash for Clunkers? He picked the wars and the drug benefit because they were Bush initiatives and he hopes they will be perceived by voters who don’t pay close attention as consistent with his his inherited-the-deficit narrative.
Ironically, whenever Obama speaks of the prescription drug benefit in the context of health care reform he criticizes it not for its cost but but for it not being generous enough!
What about “tax cuts that weren’t paid for”? [continued below the chart]
Obama’s mantra that the tax cuts “weren’t paid for” is contrived to create the false perception that tax revenue went down. But as the chart shows revenue was going down before 2003 when the current tax rates were enacted. Then, the trend reversed and revenue went up quickly for four years. Revenue did go down later, when taxable profits and incomes fell sharply due to the recession. But even though this recovery from recession has been the weakest on record revenue is coming back up, with no change from the Bush tax rates.
There is no historical basis for the belief so often expressed in the media that lower tax rates automatically bring in less tax revenue. There have been three rounds of major income tax rate reductions since World War II. Significant income tax revenue increases followed all three.
The reporters never ask President Obama the obvious follow-up questions:
- Regarding a tax cut, what does he mean by “paid for”? What would that look like?
- By his definition is there any historical example of any tax cut that was “paid for?”
Obama would be stuck for answers because his “paid for” assertion is not meant to be a statement of fact. It is meant to plant a false perception in the minds of the voters.