Archive for August 8th, 2011

Instead of discussing how to solve America’s debt problem, most politicians in Washington spend their time arguing about which president is to blame for the disaster. Yesterday, Dan Mitchell, Senior Fellow at the Cato Institute, presented his answer to that question:

To be fair, Obama’s responsibility for the downgrade is only 15 percent.

However, I would certainly query his result. A brief look at the last decade seems to tell much more about who is to blame.

When former President Bill Clinton left office, the federal government actually had a fiscal surplus. Thus, the whole deficit and debt problem was caused by decisions made in the last decade. That is to say, the only point to discuss is what percentage of the blame has to be assigned to George W. Bush, and what percentage to Barack Obama.

US Federal Tax Revenues and Expenses

Certainly, both have massively increased government spending on warfare and welfare. All this at a time, when tax revenues did not allow to pay for three wars and new entitlement programs. Both presidents clearly wanted to forward the bills to their successors.

But well, instead of discussing how much blame belongs to Bush vs Obama, we should rather think about how to clean up the mess. The first (useful) proposal has already been presented.

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