Obama's Magical Thinking
Attempting to keep up with the Orwellian mental evasions of modern liberals can be exhausting. After weeks of following the president's pronouncements on the matter of the deficit, I remain undecided as to whether he is a liar or whether he has become disconnected from reality altogether.
Let's consider a few of the propositions put forward by the president on this matter:
First, he has maintained -- as in his press conference on Friday -- that the problem is primarily a result of the actions of the previous administration. He cited the War on Terror, the Medicare prescription drug benefit, and the 2001 and 2003 tax cuts as the source of the deficit. This is simply untrue.
Let's travel back in time half a decade, to George W. Bush's second term. Over the first few years of his term, the deficit trended steadily downward -- from over $400 billion in FY2004 to $161 billion in FY2007. In FY2008, as a recession began (and a Democratic Congress took office), the deficit trended back up into the $400 billion range.
Prior to 2008 the federal government was about a year of growth from a balanced budget with the war, the tax cuts, and the prescription drug benefit all taken into account. Such a deficit as existed was less than 10% of the present deficit. None of these costs has significantly increased since 2008. In fact, the cost of the war has declined. Therefore, to think that the $1.5-trillion increase is a result of the previously mentioned factors requires one to hold a magical belief that everything wrong in the world is the fault of the 43rd president. That, in the face of all reality, some liberals persist in this belief is unsurprising as in their minds President Bush has been become a Goldstein-like figure of hate conjured up to excuse the errors the present government.
So, where did the present deficit come from? Simple: it came from the current president. It is true that, when he took office, the deficit had -- temporarily -- hit a record level. This was a result of one-time emergency measures such as TARP and the bailouts of Freddie Mac and Fannie Mae. These were not, nor were they ever intended to be, the harbinger of a new fiscal order. Instead, they were all one-time charges that President Obama and his allies have sought to exploit in order to justify a massive expansion in the federal government.
The deficit that the president inherited upon taking office should have immediately declined as these emergency programs ended. That it did not is a reflection of a conscious decision by this president, with the backing of the Democratic Congress, to use what should have been a temporary situation a new baseline for government spending. Instead of being treated as a momentary and monstrous aberration, under Obama -- as a result of the Stimulus, his budget, and health care "reform" -- trillion-plus-dollar deficits suddenly became the new normal.
The president and his allies now present massive increases in taxation as the only way to resolve this issue. One can only presume that this was the design all along. The reverse of the Republican strategy of years past, the Democrats have manufactured a massive deficit through increases in spending and now insist upon tax increases to fix the issue. There's one major problem with this: even if we momentarily forget that it's massive increases of spending, not a lack of federal taxation, that have caused this, we cannot escape the reality that the tax increases sought by the president would have practically no effect upon a deficit of the size we now face.
To put this in perspective -- all of the revenue from over a ten-year period that would be brought in from raising taxes for everyone making more than $200,000 per year would barely cover half of the deficit from this year alone. Raising taxes upon everyone, which the president insists he would never do, would, under ideal conditions, perhaps raise enough money to cover a little under a third of deficits over a ten-year window.
In order to sincerely believe the position being put out by on these matters, one has to be entirely ignorant of the facts. The truth is that there will never be European-style government spending in the United States without European-style taxation of everyone. That not only means higher income taxes but, over the long term, it almost certainly means a national sales tax. To believe otherwise is to believe in a demented form of American fiscal exceptionalism where the United States alone is able to defy economic principles.
On balance, I would prefer to think that the present leaders of the federal government are simply lying and that Obama and his cronies have created this crisis in the full knowledge of the facts and are simply seeking to manipulate them in order to manufacture their desired outcome of a more European United States. However, what holds true for the leaders is almost certainly not true for the followers. This is the lamentable result of decades of an education system wherein insisting upon such rigid and arbitrary concepts as "facts" and "truth" has been regarded as hopelessly reactionary and potentially injurious to individual self-esteem.