Deficit problem is a Lack of Revenue Problem, Not a Spending Problem
In the past week, Fox News figures have adopted the GOP talking point that the nation's deficit is a "spending problem, not a revenue problem." But numerous economic experts have said that decreased revenue is a major cause of the deficit.
..But Numerous Economic Experts Say That We Have A Revenue Problem
Krugman: "Government Spending Has Continued To Rise More Or Less On Its Pre-Crisis Trend" While "Revenue Has Plunged." In an October 17, 2010, blog post, Nobel Prize-winning economist Paul Krugman wrote:
For all those commenters saying that we must have had a surge in government spending -- I mean, look at the deficit! -- a simple picture:
krugmandeficitchart1
Government spending has continued to rise more or less on its pre-crisis trend. Revenue has plunged, because the economy is deeply depressed. [NewYorkTimes.com, 10/17/10]
Krugman: Since 2007, "Revenue Plunged, Leading To Big Deficits." In an October 18, 2010, post, Krugman wrote:
During the pre-crisis period, spending grew slightly faster than GDP -- that's Medicare plus the Bush wars -- while revenue grew more slowly, presumably reflecting tax cuts.
What happened after the crisis? Spending continued to grow at roughly the same rate -- a bulge in safety net programs, offset by budget-slashing at the state and local level. GDP stalled -- which is why the ratio of spending to GDP rose. And revenue plunged, leading to big deficits.
But I'm sure that the usual suspects will find ways to keep believing that it's all about runaway spending. [NewYorkTimes.com, 10/18/10]
Krugman also included this chart: see above
...Former Reagan OMB Official: "I Think The Biggest Problem Is Revenues." In an interview with Talking Points Memo, David Stockman, a former Office of Management and Budget director under President Reagan, responded to Rep. Paul Ryan's (R-WI) budget plan and stated: "I think the biggest problem is revenues. It is simply unrealistic to say that raising revenue isn't part of the solution." From Talking Points Memo:
While the government teetered on the brink of a shutdown last week over short term funding, economists across the ideological spectrum weighed in on the GOP's long-term plan with negative reviews. The biggest shock came from high-profile economists with GOP leanings, who also criticized it on the merits.
"It doesn't address in any serious or courageous way the issue of the near and medium-term deficit," David Stockman told me in a Thursday phone interview. "I think the biggest problem is revenues. It is simply unrealistic to say that raising revenue isn't part of the solution. It's a measure of how far off the deep end Republicans have gone with this religious catechism about taxes."
...David Cay Johnston: "There Is A Simple, Factual Way To Describe What Is Happening To Our Government: We Have A Revenue Problem." In a March 4 column, Pulitzer Prize winner and economics author David Cay Johnston wrote: "There is a simple, factual way to describe what is happening to our government: We have a revenue problem." From Johnston's column:
Right after the midterm elections, when false claims that lower tax rates increased revenues helped win votes, Fox News captured the lockstep approach perfectly in a piece on its website about how Republican leaders were "on message."
...Harvard Business Review Group Director: "[T]he Giant Deficit Is Mainly The Result Of The Collapse In Tax Receipts Brought On By The Recession." In an October 2010 post on his Reuters blog, Justin Fox, editorial director of the Harvard Business Review Group, analyzed the deficit and concluded that it was "mainly the result of the collapse in tax receipts brought on by the recession":
The Treasury Department reported on Oct. 15 that the deficit in fiscal 2010, which ended Sept. 30, was $1.294 trillion. That's less than FY 2009's $1.416 trillion, but it's still really really big. Why is it so big, though? Is it because of all that stimulus and bailout spending? Or is something else going on?
Anyone who has ever had a hardheaded friend or relative who refuses to accept responsibility or admit their mistakes knows what is going on with Republicans and our economy. They recklessly cut taxes, failed to pay for two wars and trashed the housing market and the economy. Now they say all our problems are runaway government spending. Conservative Republicans are the party of irresponsible welfare queens who now refuse to pay the bill which has come due.
Conservative media stands by one of its most infamous liars, Fox News And Hannity “Forget” Breitbart’s History Of Deceit And Dishonesty While Helping To Flog His Book
We do have death panels in America. Its run by Congressional Republicans, with Paul Ryan (R-WI) steering the ship - Republicans Violate Their "Seniors' Bill of Rights"
That didn't take long. As the battle over health care reform reached a fever pitch in the fall of 2009, the Republican National Committee rolled out a "Seniors' Bill of Rights." But with the midterms safely won, the GOP has predictably turned its back on its pledge of "no cuts to Medicare to pay for another program." After all, the House GOP budget passed last week not only and massively shifts costs onto the elderly. As it turns out, the Ryan plan calls for the very same cuts to the Medicare Advantage program Republicans decried during the 2010 elections.
