Monday, December 22, 2008

The Real Cost of Bush

The Seven Deadly Deficits

What the Bush years really cost us, and how President Obama can get the economy back on track.

There are two hypotheses (besides simple incompetence) about why Republicans paid so little attention to the growing budget shortfall. The first is that they simply trusted in supply-side economics—believing that, somehow, the economy would grow so much better with lower taxes that deficits would be ephemeral. That notion has been shown for the fantasy that it is.

The second theory is that by letting the budget deficit balloon, Bush and his allies hoped to force a reduction in the size of government. Indeed, the fiscal situation has grown so scary that many responsible Democrats are now playing into the hands of these "starve the beast" Republicans and calling for drastic cuts in expenditures. But with Democrats worrying about appearing soft on security—and therefore treating the military budget as sacrosanct—it is hard to cut spending without slashing the investments most important to solving the crisis.

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