The biggest culprit, by far, has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. Together, the economy and the tax bills enacted under former president George W. Bush, and to a lesser extent by President Obama, wiped out $6.3 trillion in anticipated revenue. That’s nearly half of the $12.7 trillion swing from projected surpluses to real debt. Federal tax collections now stand at their lowest level as a percentage of the economy in 60 years.
Big-ticket spending initiated by the Bush administration accounts for 12 percent of the shift. The Iraq and Afghanistan wars have added $1.3 trillion in new borrowing. A new prescription drug benefit for Medicare recipients contributed another $272 billion. The Troubled Assets Relief Program bank bailout, which infuriated voters and led to the defeat of several legislators in 2010, added just $16 billion — and TARP may eventually cost nothing as financial institutions repay the Treasury.
Medicynical Note: As noted our deficits originated in the Bush administration’s two recessions, two expensive wars and the multiple huge huge cuts given our wealthiest citizens.
Proposing to fix the problem by cutting services to the middle class and poor while cutting taxes on the wealthy even more doesn’t add up and is intellectually flawed.
That said, cutting health care costs remains a priority as spending on health is increasing at an unsustainable rate. Ryan’s proposal to ration care by wealth is flawed and jeopardizes lives. We need to make health reform work.