XPost: alt.flame.rednecks, alt.flame.right-wing-conservatives, a   
   t.politics.socialist.nazi   
   From: okamuraj005@hawaii.rr.com   
      
   What should be the lesson of this story?  That perhaps, you cannot trust ANY   
   politician to do what is right?  That the only way to get a politician to   
   maybe do what is right, is to force them to do the right thing?   
      
   "Aisyphus"  wrote in message news:Xns9F0C4EC5FE7BEchang@194.177.98.144...   
      
   Running in the red: How the U.S., on the road to surplus, detoured to   
   massive debt By Lori Montgomery, Published: April 30   
      
   The nation’s unnerving descent into debt began a decade ago with a choice,   
   not a crisis.   
      
   In January 2001, with the budget balanced and clear sailing ahead, the   
   Congressional Budget Office forecast ever-larger annual surpluses   
   indefinitely. The outlook was so rosy, the CBO said, that Washington would   
   have enough money by the end of the decade to pay off everything it owed.   
      
   Voices of caution were swept aside in the rush to take advantage of the   
   apparent bounty. Political leaders chose to cut taxes, jack up spending   
   and, for the first time in U.S. history, wage two wars solely with   
   borrowed funds. “In the end, the floodgates opened,” said former senator   
   Pete Domenici (R-N.M.), who chaired the Senate Budget Committee when the   
   first tax-cut bill hit Capitol Hill in early 2001.   
      
   Now, instead of tending a nest egg of more than $2 trillion, the federal   
   government expects to owe more than $10 trillion to outside investors by   
   the end of this year. The national debt is larger, as a percentage of the   
   economy, than at any time in U.S. history except for the period shortly   
   after World War II.   
      
   Polls show that a large majority of Americans blame wasteful or   
   unnecessary federal programs for the nation’s budget problems. But routine   
   increases in defense and domestic spending account for only about 15   
   percent of the financial deterioration, according to a new analysis of CBO   
   data.   
      
   The biggest culprit, by far, has been an erosion of tax revenue triggered   
   largely by two recessions and multiple rounds of tax cuts. Together, the   
   economy and the tax bills enacted under former president George W. Bush,   
   and to a lesser extent by President Obama, wiped out $6.3 trillion in   
   anticipated revenue. That’s nearly half of the $12.7 trillion swing from   
   projected surpluses to real debt. Federal tax collections now stand at   
   their lowest level as a percentage of the economy in 60 years.   
      
   Big-ticket spending initiated by the Bush administration accounts for 12   
   percent of the shift. The Iraq and Afghanistan wars have added $1.3   
   trillion in new borrowing. A new prescription drug benefit for Medicare   
   recipients contributed another $272 billion. The Troubled Assets Relief   
   Program bank bailout, which infuriated voters and led to the defeat of   
   several legislators in 2010, added just $16 billion — and TARP may   
   eventually cost nothing as financial institutions repay the Treasury.   
      
   Obama’s 2009 economic stimulus, a favorite target of Republicans who blame   
   Democrats for the mounting debt, has added $719 billion — 6 percent of the   
   total shift, according to the new analysis of CBO data by the nonprofit   
   Pew Fiscal Analysis Initiative. All told, Obama-era choices account for   
   about $1.7 trillion in new debt, according to a separate Washington Post   
   analysis of CBO data over the past decade. Bush-era policies, meanwhile,   
   account for more than $7 trillion and are a major contributor to the   
   trillion-dollar annual budget deficits that are dominating the political   
   debate.   
      
   As Congress prepares this week to launch a high-stakes battle over whether   
   to raise the legal limit on borrowing, the analyses offer a clearer view   
   of the drivers of the debt — and of the difficulty of re-balancing the   
   budget without new tax revenue.   
      
   Most Republicans reject raising taxes as part of the solution; House   
   Speaker John A. Boehner (Ohio) has called it a “non-starter.” But   
   Democrats won’t go for a proposal based solely on spending cuts. The“Gang   
   of Six,” a bipartisan Senate group dedicated to debt reduction, is   
   expected to unveil a strategy as soon as this week that couples sharp   
   spending cuts with a rewrite of the tax code that would raise additional   
   revenue.   
      
   (The debt ceiling, set at $14.3 trillion, covers all federal debt,   
   including money the Treasury owes other federal entities, such as the   
   Social Security trust fund. The CBO data focus on the portion of the debt   
   borrowed from outside investors. The debt is the accumulation of annual   
   deficits; if annual budgets are in surplus, the nation can pay down the   
   debt.)   
      
   The annual surpluses that set the nation on this course emerged in the   
   final years of the Clinton administration. In the typical American   
   household, a surplus comes as welcome news. But the White House is not a   
   typical household. When Treasury Secretary Robert Rubin saw the budget   
   shift into the black in 1998, he immediately warned President Bill Clinton   
   that, politically, it was a mixed blessing.   
      
   Rubin wanted to use the surplus to start repaying the debt, which was then   
   just more than $3 trillion. The White House billed it as “saving Social   
   Security first,” viewing the surplus as an opportunity to shore up the   
   nation’s finances before huge numbers of the baby boom generation began   
   claiming federal retirement benefits. “The problem was a whole other part   
   of the political spectrum wanted to use the surplus for tax cuts,” Rubin   
   said in an interview. “They said they wanted to give the people back their   
   money. Of course, it was also the people’s debt.”   
      
   What to do with the surplus became a central issue of the 2000   
   presidential campaign, with Vice President Al Gore arguing that much of it   
   should be put in a “lockbox” to protect Social Security and Medicare. Bush   
   pushed for a broad tax cut, arguing that taxpayers at all income levels   
   were owed a refund. “Some say that the growing federal surplus means   
   Washington has more money to spend, but they’ve got it backwards,” Bush   
   said as he accepted the GOP nomination in August 2000. “The surplus is not   
   the government’s money. The surplus is the people’s money.”   
      
   As soon as he took office, Bush pushed Congress to make good on his tax   
   pledge. Less than a week after his inauguration, he got a boost from   
   Federal Reserve Chairman Alan Greenspan, who testified before the Senate   
   Budget Committee that “tax reduction appears required” to prevent the   
   federal government from accumulating too much cash. Greenspan feared that   
   large surpluses would turn the government into the nation’s largest   
   investor, creating distortions in the markets.   
      
      
   [continued in next message]   
      
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    * Origin: you cannot sedate... all the things you hate (1:229/2)