Saturday, June 11, 2011 | 2:01 a.m.
When President George W. Bush took office in 2001, he was handed quite the gift. The nation had been running a budget surplus, and there was talk that the federal government could be debt free by 2009.
But that wasn’t to be. Instead of using the money to pay down the deficit, Bush pushed for tax cuts, especially for the wealthy. A decade ago this past week, the first piece of the ignominious Bush tax cuts became law.
“We recognize, loud and clear, the surplus is not the government’s money,” Bush said at a bill signing ceremony. “The surplus is the people’s money. And we ought to trust them with their own money.”
Unfortunately, Americans are paying a heavy price for the Bush administration’s economic policies in the form of tremendous debt. While Bush cut taxes, he and Republicans in Congress supported more federal spending.
The Republicans didn’t see fit to pay for the wars in Afghanistan and Iraq — which have cost more than $1 trillion — or much of anything else. There was no plan to increase taxes or find other ways to free up federal money to pay for those efforts. As a result, the surplus vanished, the government was back to borrowing and the deficit skyrocketed.
Maya MacGuineas, president of the Center for a Responsible Federal Budget, told NPR that the federal surplus was “one of those ‘you can’t count your chickens before they’ve hatched’ moments.”
“You can’t cut taxes without cutting spending,” she says. “But what did we do? We cut taxes and we increased spending. So we left ourselves in a tremendous fiscal mess.”
The nation will be in a terrible financial situation for years to come if it doesn’t do something about the deficit. The Republicans have used the situation to try to further their narrow ideology and cut Social Security, Medicare and other federal programs.
The Republican leadership in Congress has laughably tried to make itself out to be fiscally responsible with its disingenuous and dangerous plans. They have even tried to blame Democrats and President Barack Obama for the nation’s economic woes, but they should look in the mirror. The GOP’s policies pushed the country into this mess.
Republicans have largely championed trickle-down economics, a theory that argues that tax breaks for the wealthy — like the Bush cuts — stimulate more investment. That is supposed to translate into more jobs and eventually more money in the average person’s pocket.
But it doesn’t work that way. The nation faced an economic downturn during Bush’s first term and it came out of it in the so-called “jobless recovery.” And his second term was marked by the Great Recession, which saw unemployment spike.
The Bush tax cuts over the last 10 years have failed, as have the Republican economic policies, which boil down to no new taxes and tax cuts for the rich. Tax increases can’t be off limits, as Republicans have declared them.
If the country is ever going to get its financial house in order, it will need a mature economic policy, and that means reasonable spending cuts along with tax increases where appropriate.