In 2000, economists saw surpluses far into the future. The basic prediction was that, in 2009, we'd be running a $710 billion surplus. In reality, we're going to see a $546 billion deficit. That's a $1.3 trillion deterioration in federal finances since Bush took office. There are, as you'd expect, a fair number of excuses. Bad economy. Terrorism. The hand of God, in other words, which reached into our treasury and grabbed out the cash. But the Center for Budget and Policy Priorities took a look at the numbers and found that the change in fiscal future was not, in fact, an act of nature. It was an outcome of policy.This massive deterioration is partly due to weaker-than-expected performance of the economy, along with other 'technical' factors that are beyond policymakers’ control. But these economic and technical factors account for less than one-fourth of the fiscal deterioration for each period, and they are not responsible for the return of deficits. Even given the disappointing performance of the economy since 2001 relative to CBO’s earlier projections, there would have been large surpluses in every year — totaling $3.4 trillion over the 2002-2011 period — if policymakers had enacted no tax cuts or program increases since 2001.The dominant factor in the unprecedented fiscal deterioration thus was not the performance of the economy. Nor was it increases in domestic programs. The key factors have been large tax cuts and increases in security-related programs. For fiscal 2009, some $1 trillion of the $1.3 trillion deterioration in the nation’s fiscal finances stems from policy actions, and tax cuts account for 42 percent of this $1 trillion deterioration.In other words, tax cuts and a war of choice accounted for the bulk of our fiscal condition. Both are policies, incidentally, that John McCain says he supports, and would continue. He also calls himself a deficit hawk. That's lying you can believe in!
