Debt and deficit levels are obviously a concern. Yes, they are very high and they have been growing. However, there are many pieces to the complex puzzle of where the debt comes from.
There are two sides, spending and revenues. There are policies enacted years before that are ongoing. There are debt ceiling questions and deficit cutting questions. The most important question is how does this all impact you? What should we be thinking about regarding debt?
Let's begin with reality. Every dollar of debt can be traced to a source. A check is written, a bill is paid, and accounts are kept of where things move. This is not some mystical ether that flies through a submorphous state creating phantasmagorical nebulae on Venus. This is hard currency. There are numbers. There are charts. You can visualize the sources of the debt.
Next, there is an important intellectual distinction between debt that accrued during a president's term and debt that accrued due to the actions of a president. A lot of our debt has been sitting on the books since the massive load created during the Reagan Administration. I would not blame that on Bush, Obama, or Romney.
A timeline of debt levels can show you how much debt accrued during someone's term. A chart of the sources of debt will point out what policies belong to whom that we are still spending on today. The Treasury extends their debt charts regularly. They handle all the money, they know where it goes. Here is one through 2011. You can see debt accrued during the Bush Administration and through most of the current president's term and the source.
The CBO often cites two other factors as crucial to additional debt. First, there are a number of automatic stabilizers that kick in when the economy collapses. All sorts of social safety net items such as food stamps and unemployment. These are not policy decisions made by a leader. They kick in.
Second, tax revenues fell off a cliff. The government is not bringing money in. Tax revenues hit an astounding low when were the lowest in relation to gross domestic product in 51 years. If the financial crisis leads automatic stabilizers to kick in raising costs and revenues are at 51 year lows, and unpaid for policies of a previous administration are still in place, you get a lot of debt.
Republicans should not be using this as a line of attack on President Obama. The president is lucky on this front because Republicans filibustered 379 bills in the past two years. More than any time in history. So, Obama did not spend money, he wasn't allowed. All policies that he proposed to create millions of jobs were blocked along with everything Democrats in Congress wanted to do. Republicans in the Senate recently blocked a 19th jobs bill and an American backlash might be brewing. Read my article on this.
Politifact covers the issue of debt ceiling and rates the following statement of President Obama as entirely true: "President Reagan did it (raised the debt ceiling) 18 times. George W. Bush did it seven times." Read the Politifact article. Obama raised the debt ceiling once or twice. Reagan and Bush exploded the debt. When you look at the current costs of Bush's policies you can see that Obama really raised the debt ceiling to pay for Bush's policies that continue today.
What about deficit cutting? Republican vice presidential nominee Paul Ryan has a major problem on this issue. He sat on the Simpson-Bowles commission on debt reduction that Obama created to examine all sides of the issue. Ryan helped craft a plan with the bipartisan team. Then, after months of tireless work to get things just right, Ryan led the charge to vote against the deficit reduction plan.
Fact checkers covered this everywhere. You may view a fact check on this
The article quotes Ryan as saying that he "Was concerned that a deal would pave the way for Mr. Obama's easy re-election."
OK, so Paul Ryan sabotaged the financial security of our entire country and now believes his abundant patriotism means he should be promoted to vice president.
Consider the Bush tax cuts. They have cost us more than $3 trillion. Compare what Obama wanted to do with those and the GOP including Paul Ryan. What impact would Obama's policy directive had on the deficit?
View one of Obama's top economic advisors from the time explaining President Obama's views:
Ryan simultaneously says that deficits are too high and then attacks Obama for deficit cutting measures regarding Medicare. Making this a further problem, Ryan submitted a plan that cut Medicare about the same, and then submitted another plan to get rid of Medicare as we know it and move senior citizens onto limited "vouchers," for seniors to buy private insurance.
The numbers are written by the Romney campaign as $716 billion dollars slashed from Medicare. They are written this way to scare seniors. This is part of a plan to gain votes in Florida in particular.
First, the GOP raised this issue when House Majority Leader John Boehner asked the Congressional Budget Office to send him a report about the costs of repealing "Obamacare." The CBO had already stated that the law reduces the deficit by more than $150 billion a year — by the end of the decade.
What came back in the next report shocked Boehner.
Repealing the Affordable Care Act, "Obamacare," which was created to bend the cost curve down, would add a tremendous amount to the deficit
You can view the entire CBO report and letter to the Honorable John Boehner.
Republicans realized they had a major issue on their hands. They wanted to repeal a policy that slashed the size of government and governments spending. So, they chose a section of Medicare spending cuts and opted to scare seniors with it.
Only, there are not really spending cuts.
Health care is about 24% of the federal budget. Each year we spend about $800 billion on it. Obama reduced the growth of Medicare spending by slowing the rise in amounts the U.S. government pays to hospitals and service providers. Yes, that is all. The savings were about $71.6 billion a year. A small portion of spending relative to the overall health care budget, but a nice leap forwards in deficit reduction. On top of that, no one loses his or her care.
More savings came from shifting people out of a very inefficient Medicare Advantage where costs were much higher and putting people into the more efficient Medicare. Theoretically, Obama did cut Medicare in this case. Does this mean that Ryan, Romney, and the GOP's proposal to repeal "Obamacare," would have us reinstate the less efficient Medicare Advantage program at full throttle?
If it is a smart choice to move from a less efficient program to a more efficient one, do Ryan, Romney, and the GOP believe it is an even smarter choice to go back to the least efficient program?
So, Ryan and Romney attack Obama for "Raiding the Medicare Trust Fund!" When Obama did nothing of the sort. Obama slowed the rise in payments to providers and bent the cost curve down. With a deficit of more than a trillion a year; does Ryan and Romney insist that we can afford to still spend the same on everything?
Taken a step further, the Republican leader in the Senate Mitch McConnell is the person who asked for Medicare reform. You can watch him ask the president for it:
Obama included McConnell’s requests for Medicare reform. Then, also created a commission to make recommendations to Congress about what is working and what is not — just as McConnell asked. Republicans now attack Obama for this panel of 15 people as, "A commission setup for rationing government care and leaving seniors out in the cold." Well, if that is what it does, the GOP leadership asked for it. Why might Obama have trouble working in a bipartisan manner with Republicans?
They ask him for things that in the future they plan on using to hang him out to dry.
How does repeal of the Affordable Care Act impact you? Well, the White House and President Obama wrote it to save you money. Watch their take on how repealing the ACA costs you big time:
Next, Romney wants to increase military spending, which is also about $800 billion a year. Our military spending equals more than most of our adversaries total spending combined. So, obviously that leads one to conclude that we should spend more?
Health care is about 24% of the federal budget, the military is about 24% of the federal budget, so not only does Romney and Ryan state that you can't cut either, Romney and Ryan want to get rid of deficit cutting measures already made and increase military spending further. Both actions make the deficit even larger.
Taken one step further, Romney's tax cut plan would cost $5 trillion. So, with revenues around the lowest they have been, deficits stacking up like crazy, the Romney/Ryan plan is to remove deficit-cutting plans that we have enacted and then dramatically increase the deficit by getting rid of huge quantities of government revenues
Does this sound like a deficit reduction plan to you?
Currently, I am the CEO of a corporation and was previously a Chief Financial Officer of a corporation I'm now a part owner of. I've had to manage the numbers for businesses for more than a decade.
Can you now see why I have a lot of problems with the bill of goods that Republicans are trying to sell the American people?
Should you hold your nose, vote for them, and then hope they suddenly become honest once they are in office?
Take one jump back to the graph of where the deficits come from. Those Bush policies that we are stuck with today, which are the main sources of debt, yeah — Ryan voted for all of those.
Lastly, let's assume Ryan, Romney, and the GOP are honest. If that is the case, then their deficit plan is to repeal deficit-cutting plans, increase Medicare and military spending, while dropping tax revenue through the floor. Does that sound like a deficit reduction plan?
You must vote against Romney and Ryan because their deficit-cutting plan dramatically increases the deficit. They have put forward a horrendous plan that makes the problem worse.
I stand firmly in support of Barack Obama because he has achieved deficit reduction while the GOP did everything they could to prevent it. Obama followed "Paygo rules," on all legislation he passed. Within the bill he accounted for cuts in other programs, or revenues, to assure that his bills were deficit neutral.
As a fiscal conservative, I stand with Obama. I run from the GOP like I've got pants made of money that were doused in gasoline and lit on fire. Get rid of the GOP they are responsible for America losing it's shirt.