'W' is written into our historical memories, as well as our federal budget
By Mike Konczal
It would be hard to think of the period of 2001-2010 as anything other than the "W" years. Even with Obama in office riding the wave of a new kind of political energy and organizing, the first two years have been spent trying to put out the economic and financial fires stoked over the past 10 years, and actually trying to start reforms for problems related to health care, immigration and pricing carbon. Reforms that should have been started a decade ago.
So "W" is definitely part of the mental landscape. But what about the budget? While going through materials about the federal budget, Roosevelt Institute fellow Arjun Jayadev made a great catch. If you plot CBO historical revenue data from 1970 to now and use projections going forward, there's a giant "W" carved into the total revenue numbers:
It's like a teenage rebel scrawling his name into his desk -- "The Gorch Was Here!" -- but with our federal government. Arjun:
Future economic historians will have no problem identifying the reason and apportioning the blame for the collapse in US public finances in the early part of the 21st century. All they have to do is look at the data and see the ‘W’ staring back at them (as outlined above). The factors behind the two collapses in the tax take as a percentage of GDP? The George W Bush tax cuts and the financial crisis under Bush (not necessarily caused, but aided and abetted by the administration). The latter of course, is the main reason for the increase in debt, not the ‘profligate spending’ of the current administration. Note that US is at the lowest tax take in nearly 40 years, and the projected increase in revenues from 2010 onwards comes about primarily because of an end to the tax cuts. The result of this collapse, amazingly, is a call for retrenchment of government spending, particularly on social expenditure (for e.g. see Blinder’s piece in the WSJ).
If people ask when Obama and others should stop blaming the former President Bush for our current economic crisis, I will now say that we can stop blaming him when our budgeted revenue is out of the "W."
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