Debt and Deficits

I have written about debts and deficits before, but I want to put all of my thoughts on this in one post. 

Republicans, including GOP candidate Romney, are making deficits and debt the big issue right now and are blaming Obama. There are so many things wrong with this.

First, the short term deficits are not Obama's fault. They are mostly the result of the recession and Bush policies (tax cuts and wars). One of the main drivers of current deficits and debt is the depressed tax revenue due to the recession. Also, spending has increased on safety net programs like food stamps and unemployment insurance, while much other spending is down (which is actually hurting the recovery). And of course the Bush tax cuts were not paid for and have contributed significantly to the debt.

In fact, the only thing you might blame on Obama is the stimulus and the bail outs. I don't know how much impact the bail outs have had, though Bush deserves as much of the credit for that as Obama. The stimulus was Obama's decision, and the right one. But this is a one-time expense, as opposed to what the Republicans are trying to say which is that Obama has grown government leading to continued deficits. The stimulus isn't that kind of spending. 

These factors though are not long term debt problems. When the economy improves, revenue will increase and safety net spending will decrease. And there will be no more stimulus or bail outs.

But Republicans also make it seem like the debt problem is an immediate one. It is not. There is no risk from our current debt or deficits. We do have a different immediate problem - unemployment but Republicans do not seem interested in dealing with that. Maybe they will if they take over control of the government. Right now, they are happy to let unemployment continue so that it hurts Obama.

We do have a debt problem. However, it is in the long term. And it has nothing to do with the current factors driving our debt - revenue, safety net, etc. Instead, our long term debt problem is due to health expenses (medicaid and medicare) and maybe social security. Though to be fair, Republicans do have a plan to deal with that, though they achieve it by putting more costs on seniors instead of reforming health care.

Having said all this, Republicans are showing that they are using deficits to get gut government spending. If they were actually concerned about deficits, they wouldn't call for tax cuts. In fact, they might even call for some modest revenue increases (a truly balanced approach that the public supports). Instead, they are gutting government programs while also calling for tax cuts, making little progress on the deficit. 

All of this means that Republicans, including Romney, are lying about the cause of the deficits, the timing on when the problem with the debt will affect us, and their actual intent on solving the problem. All of this is obvious and demonstrable.

And yet I have not seen an effective response from Obama or the Democrats. So instead, the public will think the deficits are Obama's fault, that deficits are an immediate problem, and that deficits can be solved with tax cuts. Awesome.