The Little Essay That Grew

        Sometimes I begin what I envision as a brief comment to post on Facebook and the muse seizes me and the scope of the screed widens. Such is today’s blog entry, Enjoy (you probably won’t if you’re a Republican)

        Two more news items today which should, but won’t, make Trumpists realize that their favorite arsehole has no grasp on the real world.

       The first, in a small(ish) inset on the front page, is a story which condenses to “Acting Defense Secretary, Mike Espy, announces that the US will send troops and armored vehicles to Northern Syria to “protect the oil fields.”  But wait, Mike, didn’t your boss just pull troops out of Syria several weeks ago?

        Does he now feel that enough Kurds have been killed to satisfy his Turkish pals? Of course, the newly deployed US troops will get a chance to, perhaps, meet some newly assigned Russian troops, since Putin rapidly acted to fill the void left by US initial withdrawals. Sadly, Trump supporters will just shake their heads as if they were watching drunken uncle Elmer charring burgers at a barbecue and say, “bless his heart, he don’t know no better.”  

       In even smaller print was the announcement that Jet Blue has been ordered by the Trump administration, to cease and desist scheduling all flights to Cuba except to Havana. This is, simply Trump cancelling an Obama executive order, not because doing so makes any sense whatsoever, but solely because they were Obama directives. What a needy, petty little man Trump has deteriorated into! Scratch that, he’s always been this way.

        Oh, and I almost forgot, the deficit is now over a trillion dollars. Of course, Trump and the minority of modern economists who espouse Modern Monetary Theory, will simply say, “No biggie, we just print more money.”  I have no intention of attempting to debate the validity of MMT, since the real economists (I just play one on TV) aren’t even in accord on the matter.

       Let’s assume, for reality’s sake, for the rest of this paragraph or two, that the prevailing (majority) theory that deficits are bad is valid. Then let’s recall how many times we have heart the words “Tax and spend liberals” issued as curse words from the political right. The too frequent use of this pejorative would, at first glance, seem to imply that Democrats are the wastrels who run up deficits while Republicans, who see themselves as deficit hawks and good stewards of public funds are the righteous guardians of the till and sound fiscal policy.

       Like much of what we hear these days, it’s a blatant lie. There have been conservatives who address the deficit (Paul Ryan was one such) but the focus of their spending cuts always seems to center on those, such as Medicare and Social Security recipients, who can least afford it, while taxes on the business elite are reduced. Accompanying these aims are the efforts to “privatize” things which are now done by the Government. Medicare is an efficient administrator of what it does, although hamstrung by mandated higher drug prices. The Pharma industry is barely, if at all, restricted in drug pricing and we all pay that price, even while many such meds are developed with NIH grants which, one might argue, means that those patents should belong to all of us, not one of us!

        Be that as it may, let’s look at the validity of the “tax and spend” charge as it relates to recent deficits. First, however, I will state, knowing that Republicans will cringe and call foul, that the Obama era deficits fall outside the “normal” flow of things due to the Great Recession which seeds were planted in the 2000-2007 period, but bore fruit just as Obama inherited the mess.

         The blame for that rests, in the opinion of far smarter individuals than I, with the advent of mortgage brokerages who issued and promptly sold, risky mortgages, knowing they’d never have to collect them, and large, essentially un-regulated  commercial banking houses, several of whom failed out-right, and more of which were bolstered by almost $700 billion in TARP funds. Interestingly enough, this resulted in almost all the commercial banking houses eventually being made whole, but was of no impact on those who homes were suddenly worth markedly less than they had paid at the same time they were laid off or “made redundant” as our Brit friends say. Looking at the Obama deficits shows that the deficits incurred were, in the main, aimed at preventing a slide into another Great Depression, and counter to allegations to the contrary, there were no “decreases in welfare eligibility rules, or “free giveaways” which was a favorite anti-Obama mantra. Even the “Obama-Phone” (never existed) was a Bush 43 program signed into law in 2008.

        So, let’s look at the non-fiscal emergency deficits:

The Top Five Contributors by Percentage: These are, regardless of circumstances, the highest percentage increases in the debt not counting the Trump data: Note that “debt” is not “deficit.”  Each year’s deficit is additive to the debt. The listing which follows lists Presidents by percentage increase, which is a bit misleading. For example, if the national debt was $10.00 (if only) a $20.00 deficit would increase it by 300%.

 Franklin D. Roosevelt: Strictly on a Percentage basis, FDR increased the debt by the largest amount. Although he only added $236 billion, this was a 1,048% increase from the $23 billion debt level left by President Herbert Hoover. Like Obama, he faced a huge economic downturn, and, of course, the Great Depression took an enormous bite out of revenues. The New Deal cost billions. But FDR's major contribution to the debt was World War II spending. He added $209 billion to the debt between 1942 and 1945.

Woodrow Wilson: Wilson was the second-largest contributor to the debt, on a percentage basis. He added $21 billion, which was a 727% increase over the $2.9 billion debt of his predecessor. Wilson had to pay for World War I. During his presidency, the Second Liberty Bond Act gave Congress the right to adopt the national debt ceiling.

Note: both these Democratic Presidents had World Wars, not of their making, to finance. It is also worthy of note that neither had Medicare or Social Security to pay either.  

Ronald Reagan: Reagan increased the debt by 186%. Reaganomics added $1.86 trillion. Reagan's brand of supply-side economics didn't grow the economy enough to offset the lost revenue from its tax cuts. That was partly because Reagan increased the defense budget by 35%. So, in essence, this was a “cut taxes, but spend more” approach. As has Trump, Reagan did what he did against the advice of almost every real economist in the nation. His own Veep (Bush 41) called it “Voodoo economics.” (If only his son had listened)

We interrupt this litany of increasing debt obligation for the eight Clinton years:  Clinton had budget surpluses for fiscal years 1998-2001, the only such years from 1970-2018. Clinton's final four budgets were balanced budgets with surpluses, beginning with the 1997 budget. Sadly, however, this would soon dissolve.

George W. Bush: President Bush added $5.849 trillion, the second-greatest dollar amount, and fourth-largest percentage increase. Bush increased the debt by 101% from the end of FY 2001, which was the last Clinton budget.

Faced with the promise of a budget surplus, Bush launched the War on Terror in response to the 9/11 attacks. The War on Terror included two wars. The War in Afghanistan cost $1.1 trillion and the unjustified Iraq War cost $1 trillion more. Bush budgets increased military spending to record levels of $600 billion to $800 billion a year, while tax cuts, primarily on the wealthy, reduced revenues. “W” also responded to the slight 2001 recession by passing the Economic Growth and Tax Relief Reconciliation Act and the Jobs and Growth Tax Relief Reconciliation Act. He approved a $700 billion bailout package for banks to combat the 2008 global financial crisis. Both Bush and Obama had to contend with higher mandatory spending for Social Security and Medicare.

Barack Obama: Under President Obama, the national debt grew the most dollar-wise. He added $8.588 trillion. This 74% increase was the fifth largest. Obama's budgets included the economic stimulus (TARP or “Bailout”) package, approved under Bush, paid for under Obama. It added $831 billion by cutting taxes, extending unemployment benefits, and funding public works projects. The Obama tax cuts added $858 billion to the debt in two years. Obama's budget increased defense spending to between $700 billion and $800 billion a year. Federal income was down, thanks to lower tax receipts from the 2008 financial crisis.

       Clearly, there is no mythical partisan split on “Tax and Spend” in fact, what emerges is more a Republican pattern in the last 40 years, of “cut taxes on the wealthy and spend anyway.” But surely that can’t be true for this “really great and wonderful” Trump economy can it? Sadly, the data says otherwise, in fact it screams otherwise.

       With no major war to fund, a self-proclaimed booming economy, and low unemployment, one might think we’d see a Clinton budget redux. The reality is depressing. The federal budget deficit increased 26% percent in 2019, reaching just over $984 billion, the highest in seven years because the government was forced to borrow more money to pay for Trump’s tax and spending policies. The deficit has increased nearly 50 percent during the Trump presidency and is projected to exceed $1 trillion in 2020.

       Annual budget deficits have now increased for four consecutive years, the first such run since the early 1980s. Another cut taxes and increase spending administration. This is a sharp rebuke to Trump, who promised as “candidate Trump” to eliminate deficits within eight years by cutting spending and expanding the economy.

 A tragic commentary on this whole contradictory mess comes from 2017, when officials had attempted to warn Trump during a meeting that debt could spike further in the coming years. Trump was indifferent however, once he realized the problem was only likely to become critical after he had completed a possible second term. “Yeah, but I won’t be here,” he said, a source who had been in the room at the time recalled. This quote has been sourced from several witnesses and is tragic in its revelation that Trump just doesn’t care.