EPI Snapshot: Basic Truths About the Deficit
The Economic Policy Institute has released a copyrighted newsletter entitled: Straight talk on the federal budget deficit.A few paragraphs:
"Some little-known facts about the federal budget deficit: It grew slower than was expected just a few months ago, stimulus spending accounts for only a small sliver of its total, and the leading health care reform proposal would provide coverage for most uninsured Americans without adding a penny to its total. Although the federal deficit is commonly dangled as the reason to block further public investment or comprehensive health care reform, that argument ignores some basic truths about the deficit."
"On August 25, the White House released an updated estimate of the federal budget deficit, which shows it now totals $1.6 trillion or 11.2% of GDP. This is $262 billion less than what was estimated in May. The Congressional Budget Office showed a smaller improvement. In anticipation of that release, EPI produced a series of reports (see below) examining the roots of the deficit and the potential impact that health care reform would have on it."
Don’t blame Obama
"For all the criticism President Obama has received for running up the deficit, it turns out that Obama’s policies have been a very small factor in the expansion of the federal budget deficit. Bush-era policies, including aggressive tax cuts and spending on the wars in Iraq and Afghanistan, have added significantly more to the total."
"In The 2009 Budget Deficit: How Did We Get Here? EPI's Research and Policy Director John Irons notes that George Bush inherited a budget surplus in 2001. Irons and a team of researchers parsed the data to show that 42% of the $2 trillion reversal of fortunes since then reflects Bush-era policies. Another 42% of that $2 trillion reflects the impact of the recession on tax revenues and spending on programs such as unemployment insurance. By contrast, the American Recovery and Reinvestment Act (ARRA), which so often is blamed for the growing deficit, accounts for just 7.6% of the total."
Read more from the newsletter at the Economic Policy Institute
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