Thursday, April 4, 2013

Our Financial Problems - Who is to Blame?

Both the Democrats  and the Republicans  are right about the fiscal problems in The United states, and both are to blame.  Both are blinded by ideology.  Both are enablers of graft and protect their sources of money.   However, the Democrats are (with some Republican bi-partisanship) are responsible for  about 87.5% of the problem, and the Republicans, living in trepidation of disapproval of the media, are suckered into grabbing 18.4% of the responsibility.  Below is an edited excerpt from

                                 All numbers are in Billions of US dollars.

Discretionary  Entitlement Interest Total Total Deficit
Spending Spending Spending Revenue
GWB   2000     799 1236 290 2325 2632 307
Pres. 2001     825 1280 262 2367 2530 163
Rep  2002     918 1383 214 2515 2318 -197
Cong 2003    1010 1448 188 2646 2183 -463
2004    1066 1474 191 2731 2240 -491
2005     1117 1521 212 2850 2483 -367
2006    1135 1577 253 2965 2688 -277
GWB 2007    1131 1574 257 2962 2787 -175
Dem Sen 2008    1205 1694 269 3168 2681 -487
Obama  pres  2009    1300 2199 197 3696 2212 -1484
Dem Cong. 2010    1399 1987 204 3590 2247 -1343
Obama 2011     1371 2062 234 3667 2344 -1323
Dem Sen 2012    1289 2053 220 3562 2435 -1127
Rep House

Doing a little math we get:

Government Average
Era Discretionary Entitlement Interest Spending Revenue Deficit
Spending Seending
 GWB Pres 981 1280 262 2367 2530 -189
Rep Congress
President 1168 1634 263 3065 2734 -331
Dems take over Senate
Obama & Dem  1349 2093 200 3643 2230 -1414
Senate  and House
Obama & Dem Senate 1339 2058 227 3614 2390 -1225
Republican House

The obvious Deficit conclusions we can draw from this are that :

  1.  The deficit did not  grow significantly under GWB and a Republican Congress.
  2. The deficit grew slightly under GWB and a split Congress.
  3. The deficit ballooned under BHO and a Democratic Congress.
  4. The deficit stopped ballooning under BHO and a split Congress.
The obvious spending  (discretionary and entitlement) conclusion  is that
spending grew from an average of  $2367 billion under GWB and a Republican Congress to an average of $3643 billion under BHO with a Democratic Congress.  An average increase of  $1276 billion or  87.5%. 

The obvious revenue conclusion is that revenue increased slightly under GWB with a split congress, but significantly decreased under BHO with a Democratic or  split Congress.  It decreased from a high of $2734 billion to a low of $2230 billion,  or $504 billion, 18.4%. 

The overall conclusion from this data is that the Republicans are responsible for about 25% of the problem, based on their posturing on taxes and revenue and the Democrats are responsible for about 75 % of the problem, based on their expostulations about taxing the rich.    The gap between increasing spending and decreasing revenue as about $1780 billion dollars.   No wonder we are in trouble.

I think the Republican position of no new taxes is based on both the untrustworthyness of their Democratic collegues and the desire to follow the Laffer  pronouncements  with tunnel vision.  The history of the  Democratic position of new taxes to increase revenue without significant spending cuts  has shown that they waste the money they have on supporting  ideological boondoggles and are unthrifty in their spending.  It appears, from the news, that most of the increased spending has gone to bailing out or rewarding high dollar contributors, or falling for every technological scam artist that supports them.  Because of the historic actions of the Democrats and BHO, the Republicans are loathe to trust them any more.  

Let's get one thing straight, The republicans think that taxes stiffle business - to an extent they are right.  However, it is probable that only taxes that affect business or commerce stiffle business.   The selected elite that get rich massaging stocks.  The banks and stockbrokers that have forgotten good financial business practices and destroy the economy, while taking home massive golden parachutes; the revolving door between lobbyists and Congress and the Executive are all self serving.   All these actions go into the spending column and our of the revenue column, with none of these actions helping businesses.  I don't think that these kind of tax cut actions were what Laffer was talking about.  That is just graft, and BHO and the Democrats are kings of the graft. 

With his ideological blinders and economic stupidity, BHO can never correct the situation.  Pelosi and Reid are in the same class.  The easiest no-cost way to ameliorate the economic situation is to remove the non-productive rules and regulations hampering business.  If he did this, BHO might generate enough revenue to pay for his "Obamacare" dream and still give graft to his supporters.  Alas he is so ideologically driven and economically stupid that this will never happen.  

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