Excuse me while I get this out of my system...
The Rethugs in DC are cheering themselves silly with the recent announcement from the Office of Management Budget that the projected national deficit for 2006 is $296 billion.
Huh. Last time I checked, $296 billion is a lot of money...and running a budget deficit of $296 billion is really shitty. As a matter of fact, if I ran my personal budget in a deficit, Bank of America would start slapping me with overdraft fees and over-the-limit fees and all sorts of other penalties designed to keep me motivated to run a balanced budget. Because, when you get right down to it, a deficit is the amount someone else has to cover your ass. In the case of our national deficit, China is Bank of America and the overdraft fee is a little something called Interest. But more about that later.
So, while Dubya is busy telling us that his tax cuts are obviously paying off...I, as usual, decided to check out the rest of the story of this fantastic $296 billion deficit.
1. Here's a look at the top five largest deficits of all time. The projection for 2006 is fourth. No wonder they're cheering.
2004 (George W. Bush) $413 billion
2003 (George W. Bush) $378 billion
2005 (George W. Bush) $318 billion
2006 (George W. Bush) $296 billion (projected)
1992 (George H. W. Bush) $290 billion
2. When George W. Bush came into office, he inherited a budget surplus of $284 billion. At that time, the Bush administration predicted a $516 billion surplus for 2006. That's an $814 Billion dollar swing to the negative. Whoopee.
3. Why is the projected deficit lower than the budgeted deficit of $350 billion? (No, that's not a typo....our Congress passed a budget with a $350 billion deficit)
The deficit is lower because tax receipts are higher than expected.
But how can tax receipts be higher if this administration CUT TAXES, you ask? Good question. The answer: Personal income tax rates were cut for the wealthiest 3% of Americans and personal tax receipts are down. Corporate income taxes, on the other hand, are up 26% vor FY06 because Corporate Profits are at an all time high. Therefore, the additional - and unexpected - taxes paid by Corporations over the last nine months is better than what was budgeted resulting in a deficit that is not as bad as what was budgeted.
4. Let's not gloss over that personal income tax thing.....the amount of tax revenue lost by giving tax cuts to Paris Hilton is $276 billion. So, the added $50 billion revenue from the surge in corporate tax receipts puts a dent in this Dubya-created deficit, but since $50 billion is less than $276 billion, the bonus revenue still falls short of making up for the huge giveaways to W.'s wealthy friends.
5. It's all a matter of perspective. Projections for 2006 look good in large part because the last 5 years have been so bad. Personal tax revenues in the last year of the Clinton administration exceeded $1 Trillion dollars. In 2005, with 6% increase in population, personal tax revenues have just climbed back to $972 Billion. Add to that a $5.6 Trillion growth in government spending and you have record deficits.
6. What about me and you? With all those record Corporate profits, is any of that wealth helping ordinary folks like us? After all, CEO salaries have increased 150% since 2001.
Here are three very important inter-related facts:
*According to the Bureau of Labor Statistics, the Census Bureau and the Federal Reserve, when you factor for inflation, wages have been stagnant since 2001.
*In 2001, the US savings rate (gross income less all expenditures) was 2.8%. It has declined since then and has been negative since the second quarter of 2005. This means consumers are spending more than they make on a monthly basis.
*According to the Bureau of Economic Analysis GDP reports, consumer spending has increased at a consumer expenditure deflator adjusted amount of 15.84% for this period.
What the hell does all that mean? Simple. Wages have not increased in 5 years. Consumers are taking money out of their savings instead of adding to it and are going into debt to continue to increase their spending.
We're making less and going into debt to buy more.
7. Let's talk about the Interest we're paying on our debt. In Fiscal Year 2005, the U. S. Government spent $352 Billion on interest payments to China and other holders of the national debt.Compare that to spending on NASA at $15 Billion, Education at $61 Billion, and Department of Transportation at $56 Billion. For the current FY06, the running total is $336 billion. That's right...we're spending five times more on Interest payments than on Education. Think of it this way...We're spending more to finance the tax cuts than we're giving away in tax cuts. It's the ultimate bad-credit, high-interest loan. And we're all paying for it.
8. There's more...so much more. Things like record bankruptcies and foreclosures, increasing interest rates and the value of the dollar overseas and all kinds of stuff that I can't bear to go into. Google it if you're feeling masochistic.
The bottom line this...
Bush and this Republican Congress have driven us into debt with their neo-conservative Cut-And-Run economy (cut taxes, run up the deficit). And when they get in front of the TV cameras to celebrate the 4th largest deficit in the history of our country, they're feeding us shit and telling us how great it is for us.
No thanks, boys. Tastes like shit to me.
Here's just one of many sources for this info. Also check out about a dozen posts on Daily Kos as well as sources like the CBO, GAO, Census Bureau, Bureau of Labor Statistics and Federal Reserve.
I'm too freakin' disgusted to add all those links.