Saturday, June 25, 2011

How Bad Is The Budget Deficit?

It is so bad, that if we do nothing, the "deficits will disappear entirely by the end of President Obama's second term".  That's right.  DO NOTHING!  In other words, let the Bush Tax Cuts expire.  Let them expire and the deficit is projected to disappear by 2016.  We don't need to cut Social Security.  We don't need to cut Medicare.  Hell, we don't even need to get out of three wars and cut the defense budget!  Simply let the Bush tax cuts expire.

Check out the figures below.  The top ones shows what happens if the Bush tax cuts expire and the bottom one shows what happens if they don't.

The republican budget crisis is a manufactured crisis.  The solution is simple.  Simply let the Bush tax cuts expires as they were originally designed to do by the republicans.

End of problem!

h/t to Green Eagle for this link.  Check out his post about it.

UPDATE:  The other thing to note is that these figures show that the deficit is clearly a revenue problem, not a spending problem like the republicans are so fond of saying.  One, count them, one revenue related item needs to be done and the deficit is solved!


  1. Amazing isn't it? How the Repubs can twist and distort reality to fit their agenda.


  2. I think that deficit is, to a certain degree, also a spending problem (in addition to it being a revenue problem). Those 2 wars have cost the treasury 2 billion dollars and counting. And, while, yes, if we eliminated the Bush tax cuts completely, that indeed would take care of it on paper. I'm just worried that a tax hike on the working and middle class would represent a major drag on overall demand in a still quite fragile recovery. In my opinion, a balance approach along the lines of the deficit commission would probably be the best one.

  3. What this points out is that whatever budget problems we have, they are not so severe that we must take draconian measures such as destroying Social Security and Medicare. Don't want to increase taxes on the poor and middle class? Fine. Raise only the top bracket and get out of the wars. That will probably do it too.

  4. I bookmarked that same TPM story but didn't get around to reading it. But it makes sense.

    Last year I was hoping Congress would "do nothing" and let the Bush tax cuts expire -- for everybody. I don't like taxes any more than the next person, but I've never heard of anyone going bankrupt because his/her income taxes were too high.

    From what I understood last Fall, letting the Bush tax cuts expire for everybody would save about $4 trillion, which is roughly the same amount that Paul Ryan wants to save by gutting Social Security, Medicare, Medicaid and all the rest of the safety net.